Federal (withholding at payout): 24% is withheld on prizes ≥ $5,000; your final federal bill depends on your total income/bracket at filing.
Pennsylvania Government
Pennsylvania state income tax: 3.07% applies to PA Lottery cash prizes (law changed in 2016). The PA Lottery withholds this on prizes ≥ $5,000. You also report on PA Schedule T.
Philadelphia School Income Tax (SIT): Philly residents owe SIT on unearned income, which includes cash lottery winnings.
Rate for Tax Year 2024: 3.75%.
Rate for Tax Year 2025: 3.74% (City announced a reduction).
SIT is generally not withheld by the Lottery—you file/pay it with your Philly SIT return by April 15.
Note: The Philly Wage/Earnings Tax (3.75% → 3.74%) is on wages, not lottery winnings. For lottery winnings, it’s the SIT that applies.
✅ In plain English: If Lucky Ticket Club wins a $1M Powerball prize, every slot holder would receive about $14.6k immediately, with the understanding that some additional federal tax will likely be due later.
Important Tax Note Even though only 24% federal & 3.07% state taxes are withheld up front, once you receive your share, the IRS will most likely add another 10–13% in federal tax (because “your share” of $750,000 Cash 5 jackpot may push you into another tax bracket even though 50% of your share was rolled over to the next game). Each member must plan for this when filing their personal return. Same applies for the Treasure Hunt. Even though we did put the winnings in our pockets & rolled it over to the next game, TAXES ARE STILL OWED!
If & when we get to the Cash 5 : 50/50 portion, this would be a great time to set aside money for taxes. Just my opinion. Once again, seek a tax professional. This NOT tax or financial advice.
Per 1 slot = $1,000,000 gross
Federal withholding (24%): $240,000
PA withholding (3.07%): $30,700
Net check at payout: $729,300
Later you file/pay Philly SIT 3.74% on $1,000,000 = $37,400 (not withheld)
After SIT: $691,900
If your final federal bracket is 37%, expect ~13% more federal due at filing ($130,000) → $561,900 after all three layers (rough estimate).
If someone has 3 slots = $3,000,000 gross
Federal withholding 24%: $720,000
PA withholding 3.07%: $92,100
Net check at payout: $2,187,900
Philly SIT 3.74% on $3,000,000 = $112,200 (file/pay later)
After SIT: $2,075,700
If in 37% bracket, additional federal due ≈ $390,000 → $1,685,700 (rough).
Residency nuances
Philly residents: owe SIT as above.
Non-Philly PA residents: no Philly SIT.
Non-PA residents who win a PA Lottery prize: PA still taxes PA-source winnings at 3.07%; your home state may also tax, typically with credits to prevent double-taxation.
Who We Are
Our private lottery group is built on a scaling strategy: start by pooling $1,000 to play Pick 4, roll any winnings into Pennsylvania’s Treasure Hunt, then step up to Cash 5, and ultimately aim for the Powerball jackpot. It’s a structured, team-based approach to maximize odds and climb from smaller wins toward the biggest prizes.
Contact Us
Email Us: info@Luckyticketclub.com
Address: Philadelphia, PA
Disclaimer: Lucky Ticket Club is a private lottery pool organized for members only. Members are encouraged to seek professional tax advice regarding their own individual tax return, claims or situation . We are not affiliated with or endorsed by the Pennsylvania Lottery, pick4, treasure hunt, cash 5, Powerball or any official lottery organization. All games are subject to state lottery rules and regulations. Participation does not guarantee winnings.