WINNERS KEEP MORE WINNINGS
Missouri Lottery winners will be able to keep more of their winnings as a result of federal tax law changes that took effect Aug. 6. Instead of withholding 28 percent in federal taxes for prizes of more than $5,000, the lottery is now only required to withhold 27.5 percent. During the next five years, the withholding will gradually drop to 25 percent.
"Players who win large amounts will really see a difference in the withholding," said Larry Jansen, controller for the Missouri Lottery. "For instance, someone who wins millions, the change could mean keeping thousands more in prize money."
The new law applies to winnings claimed and annuitized prize payments made on or after Aug. 6.
The rate changes are scheduled as follows:
-- Aug. 6, 2001, to Dec. 31, 2001 - 27.5 percent
-- 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 onprizes of $600 or more.