How much money do you get to keep if you win the lottery in KY? The breakdown

Winning the Kentucky lottery sounds like a dream, but federal and state taxes take a sizable bite before the money hits your bank account. Here’s a breakdown of what winners actually take home and where proceeds go.

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

Here are key takeaways:

• Lottery winnings are taxed at both the federal and state levels. Winners must fill out a W-2G form to report gambling winnings, and if total taxable income exceeds $626,351, the tax rate can jump to 37%.
• Winners can choose a lump sum or annual payments spread over at least 10 years. A lump sum can significantly affect your tax bracket for that year. Lottery winnings don’t count as earned income and won’t affect Social Security benefits.
• A recent example: Lexington Jackpot Scratch-off winner Frank Arrazola took home $72,500 of his $100,000 prize after taxes, according to the Kentucky Lottery. The gas station that sold him the ticket received $1,000.
• For every ticket sold, 70% goes to winners, 20% goes to the Commonwealth, 5% goes to retailers and 5% goes to lottery administration, according to the Kentucky Lottery.
• The Commonwealth’s 20% share funds education programs. In 2025, the Kentucky Lottery awarded more than $31 million in grants and scholarships in Fayette County alone, and since 1999, $5.4 billion in proceeds have supported Kentucky college students.

The summary points above were compiled with the help of AI tools and edited by journalists. The full story in the link at top was reported, written and edited entirely by journalists.