If you win the Kentucky lottery, how much do you actually take home?

You are driving home from a long day of work. You stop to get a soda and fill up your car with gas.

You see the lottery tickets behind the counter and think, “Hey, why not?” You scratch off the ticket with the quarter in your center console.

You’ve won the Kentucky lottery.

You are shocked and thrilled and everything in between.

Now what? You do not get all the money your winning ticket says you won. So how much do you actually take home?

Where the winnings end up

The dollar amount denoted on the check from the Kentucky Lottery is taxed on the federal and state levels before it makes it into your bank account.

When someone wins a lottery, they must fill out a W-2G, a federal income tax form to report gambling winnings.

• For winnings of over $5,000, the federal government takes 24% in taxes. According to state law, lottery winnings are taxed the same as earned income, yielding 3.5% be withheld at the state level. The state income tax was reduced from 4% to 3.5% for the 2026 tax year.

Lottery winners can choose to receive their prize all at once or break the payments up annually over a minimum of 10 years. Choosing to receive your winnings as a lump sum can heavily affect your tax bracket and change the way you file all taxes for that tax year.

If winnings are large enough and your total taxable income exceeds $626,351, your tax rate can be bumped up to 37%.

Lottery winnings are not recognized as earned income and will not affect a person’s social security benefits.

Frank Arrazola, a recent Lexington Jackpot Scratch-off winner, was handed a check for $100,000 after the numbers on his ticket matched the $100,000 prize. According to the Kentucky Lottery, Arrazola took home $72,500 after taxes. The gas station he bought the winning ticket received $1,000 for the sale.

Who gets state proceeds from the lottery?

For every ticket sold, according to the Kentucky Lottery, 70% of the sale goes to Kentucky lottery winners, 20% goes to the Commonwealth, 5% goes to the stores that sell the lottery games and 5% goes to the Kentucky Lottery administration.

The 20% of Kentucky lottery sales given back to the Commonwealth funds numerous programs supporting the education of Kentuckians. In 2025, the Kentucky Lottery awarded $31,142,212 in the form of 13,889 grants and scholarships in Fayette County.

The Kentucky Educational Excellence Scholarship is fully funded by the sale of Kentucky lottery tickets and is awarded to high school students based on their yearly GPA. Students can also earn KEES money by scoring at least a 15 on the ACT or at least an 830 on the SAT.

Each year a student earns a GPA of at least 2.5, they are rewarded at least $125 toward attendance at any Kentucky state college up to $500 for earning a 4.0 GPA. Students who score 15 on the ACT receive $36 toward college and any student who scores 27 or higher receives $500.

The Kentucky Higher Education Assistance Authority, a public agency established to improve students’ access to higher education, is 97% funded by Kentucky Lottery sales aiding multiple scholarships, grants and programs in addition to KEES. Their programs:

• Teacher scholarship
• Dual credit scholarship program
• Kentucky Tuition Grant
• Kentucky National Guard Tuition Award Program
• Work Ready Kentucky Scholarship
• College Access Program (CAP)

Since 1999, $5.4 billion of Kentucky Lottery proceeds have funded grants and scholarships for the college students of Kentucky.

Players of the lottery are encouraged to play responsibly, know the odds and never spend more than you can afford to lose. If gambling is a problem, seek help immediately. Call 1-800-GAMBLER for confidential support.