Lottery Winners Pay Huge Tax! If you win a lottery, don't spend your money until you discover what taxes you owe. First, there's a minimum federal income tax rate on your winnings of 35%. Then there's state income tax. Next, if you share your winnings, you have to pay a 35% federal gift tax on any amounts you gift over $5.12 million (the current exemption amount). Finally, at death, your estate will owe additional estate taxes (55% after January 2013) on the rest.
