If you're not a US citizen and you win — or you're an immigrant in a city like New York wondering how a windfall would be taxed — the rules are different from what a citizen faces, and the difference is expensive. Here's how lottery taxes work for non-residents and immigrants, including the 30% rule, the tax treaties that can claw some of it back, and the ITIN you'll need.
The 30% rule for non-resident aliens
A US citizen or resident alien has 24% withheld federally on a lottery prize over $5,000 (and may owe up to 37% at filing). A non-resident alien is different: a flat 30% is withheld on the entire prize, right off the top, with fewer offsetting deductions.
That 6-point gap sounds small until you scale it. On a $217 million prize, the difference between 30% and 24% withholding is roughly $13 million. On a billion-dollar-class jackpot, the non-resident's higher rate can mean tens of millions less in hand. The IRS treats lottery winnings of non-resident aliens as US-source income subject to this withholding.
Resident alien vs non-resident alien — which are you?
This distinction drives everything:
- Resident alien (green-card holders, and others who meet the IRS "substantial presence" test): taxed like a US citizen — 24% withholding, up to 37%.
- Non-resident alien (most tourists, many visa holders, foreign nationals not living in the US): the flat 30% federal withholding applies.
Undocumented immigrants living in the US may qualify as resident aliens under the substantial-presence test — meaning they could be taxed at citizen rates rather than the 30% non-resident rate. This is exactly the kind of thing a tax professional sorts out, and it can be worth millions.
Tax treaties: how some foreigners reclaim the 30%
Here's the part most people don't know. The US has tax treaties with roughly two dozen countries under which residents' gambling and lottery winnings are taxed at a reduced rate — or not taxed by the US at all. Residents of countries including the United Kingdom, Germany, France, Italy, Spain, Japan, Ireland, the Netherlands, Sweden, and others may be exempt.
The withholding still happens at payout, but a treaty-country resident can file a US non-resident return to reclaim it. To do that you need:
- An ITIN (Individual Taxpayer Identification Number) or SSN — required to file at all.
- Form W-8BEN to claim treaty benefits, and a Form 1040-NR return.
If your country has no treaty, the 30% generally stands.
Don't forget state tax — especially in New York
Federal is only one layer. The state where you win takes its cut too, and New York is the harshest in the country: up to 10.9% state plus about 3.876% New York City local tax. A non-resident winning in NYC faces the 30% federal rate and roughly 14.8% state-plus-city. Win the same ticket in Florida or Texas and the state share is zero. We cover the New York math in why New York lottery winners keep the least.
What to do if you're a non-citizen winner
- Don't sign or claim immediately. Secure the ticket and get advice first.
- Hire a cross-border tax professional. Resident-vs-non-resident status, treaty eligibility, and ITIN filing are specialist work.
- Get an ITIN. You'll need it to claim and to file for any treaty refund.
- Factor in your home country. Some countries tax foreign income; others don't tax lottery wins at all. Your total bill depends on both sides.
Eligibility to win is the easy part — we cover that in can a non-citizen or immigrant win the US lottery. The taxes are where expert help pays for itself many times over.
General information only, not tax advice. Cross-border lottery taxation is complex — consult a qualified international tax professional. Play responsibly — 1-800-GAMBLER.