Discount an annuity payout back to today's money
A prize paid monthly and a prize paid all at once cannot be compared by their face amounts alone. Enter the payment, the term and a discount rate, and the tool shows both the nominal total and the present value.
The formula used
The nominal total is simply the payment A multiplied by the term n. The present value uses a monthly rate i equal to the annual rate divided by 12: PV = A x (1 - (1 + i)-n) / i. When the rate is 0 the denominator vanishes, so the present value is set equal to the nominal total instead. If you enter a lump-sum alternative, it is compared with the present value and the gap is reported to the nearest dollar; leaving it blank reports that no comparison was made.
Tax rates applied (US, as of 2026)
Lottery winnings over $5,000 are subject to 24% federal withholding and are reported on IRS Form W-2G, so the federal rate defaults to 24%. Withholding is only a prepayment: depending on your bracket the final federal rate can reach 37%, and you can raise the rate to match. State income tax varies by state, so it is your own input with a default of 0. The same combined rate is applied to each monthly payment and to the lump sum, and both pre-tax and after-tax figures are shown. The final liability is decided when you file your tax return.
Assumptions and what is out of scope
Payments are assumed to arrive in full at the end of each month and to stay level for the whole term. Tax rules can change, so check the rules in force when you are paid. Inflation, reinvestment returns and the risk of payments stopping are also left out. Per-ticket expected value and expected profit or loss are not covered. This is reference material as of October 2026 and not an encouragement to buy: over the long run lottery play accumulates expected loss.
Frequently asked questions
Yes. As of 2026 the tool applies the US 24% federal withholding on lottery winnings over $5,000 (IRS Form W-2G) by default, plus a state rate you enter (default 0), and shows both pre-tax and after-tax amounts. Your final federal rate can be up to 37% depending on your bracket, and the final liability is settled on your tax return.
No official recommended rate is offered. It is the annual return you would expect if the same money sat elsewhere, so it is your own figure. Entering 0 makes the present value equal to the nominal total.
Per-ticket expected value and expected profit or loss are not covered. This tool only discounts an already fixed stream of annuity payments and compares it with a lump sum.