WINNERS TO SEE BIGGER CHECKS
Missouri Lottery winners will be able to keep more prize winnings starting Jan. 1, 2002, when a second reduction in the federal tax withholding takes place. The second reduction will take federal taxes withheld from prizes from 27.5 to 27 percent. The first reduction, on Aug. 6, took the rate from 28 percent down to 27.5 percent.
The next decrease is scheduled for Jan. 1, 2004, when federal withholding on prizes will drop to 26.5 percent. During the next four years, the withholding will gradually drop to 25 percent.
"For someone who wins millions, the change could mean keeping thousands more in prize money," said Larry Jansen, controller for the Missouri Lottery.
The new law applies to winnings claimed and annuitized prize payments .
Future rate changes are scheduled as follows:
--Jan. 1, 2002, to Dec. 31, 2003 - 27 percent
--Jan. 1, 2004, to Dec. 31, 2005 - 26.5 percent
--Jan. 1, 2006, and after - 25 percent.
In addition to federal tax withholding, the Missouri Lottery also withholds 4 percent on prizes of $600 or more.
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