Taxes on lottery winnings

[i8mygoldfish]

I recently won 1,000 dollars via the lottery in the state of NJ. I understand as long as  i provide a social security number to the Lottery Bureau they will take 25% out before they even cut a check.

How much more wil lit get taxed come the end of the year? Do they tax the 750 or the full 1000 at the end of the year if it is indeed taxed again?

Is the tax rate determined by my entire income bracket? If I stay in the same tax bracket, is there additional taxes due to the lottery?

[rjs · Accepted solution]

For your federal tax, the full $1,000 will be included in your taxable income. Your tax is calculated on your total income, including the $1,000 lottery winnings. The tax is not calculated separately on the lottery winnings. Any federal tax that is withheld from your winnings will be added to any other tax you had withheld during the year, such as from your pay. The total withholding will be applied to your total tax.

On your New Jersey tax return, New Jersey does not tax prizes of less than $10,000 from the New Jersey lottery. Your $1,000 lottery winnings will not be included in the income on your New Jersey tax return.