October 13, 2016

Do Nonresidents Pay Connecticut Income Tax on Powerball Tickets Purchased in Connecticut?

Yes, nonresidents are generally required to pay Connecticut income tax on multistate lottery winnings, including Powerball, if they purchase the winning ticket here.  Specifically, nonresidents must pay Connecticut income taxes on the winnings if (1) they meet the gross income test (i.e., have taxable income that reaches the filing thresholds listed below) and (2) the amount paid is reportable to the IRS (i.e., $600 or more and at least 300 times the amount of the wager).
For the 2016 tax year, the filing threshold is:
  • $12,000 for married people filing separately,
  • $15,000 for single filers,
  • $19,000 for heads of household, and
  • $24,000 for married couples filing jointly or surviving spouses.
By law, the Connecticut Lottery Corporation withholds state income tax from payments of reportable Connecticut lottery winnings, including Powerball winnings (Conn. Agencies Regs. § 12-705(b)-2).

For further information, a 2015 Department of Revenue Services informational publication explains the income tax treatment of state lottery winnings received by residents and nonresidents.