Do You Have to Be a Permanent Resident to Claim Lottery Winnings?

A legal or financial adviser can help you understand tax laws for nonresident lottery winners.
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The odds of winning the lottery are considerably long, but it does happen. It's important to know whether you can claim the money if you become one of the lucky few. Of the 50 states, 43 operate public lotteries and distribute the proceeds to different programs. Each state creates its own regulations. It's best to contact the lottery office in the state where you plan to buy tickets to learn the rules for eligible players.

Determining Eligibility

The regulations regarding eligible lottery players vary by state. In Florida, for instance, the game is open to citizens of the U.S., U.S. territories, Mexico and Canada; only U.S. residents can play the lottery in Virginia; and Washington and Illinois welcome both residents and nonresidents. In all states, players must be at least 18 years of age.

Securing Your Ticket

When you know you have a winning lottery ticket, the first thing to do is to sign it. A winning lottery ticket is a bearer document, which means ownership is determined through possession, not registration or some other separate record. Your signature on the ticket will prevent anyone from claiming your winnings if you happen to lose it before you can file a claim. It would be difficult to prove you are the rightful owner without the signature. It's best to claim your prize as soon as possible. In many states, the tickets expire 60 to 180 days after the drawing.

Filing a Claim

You can claim your winnings at a lottery office branch. A representative will ask for two forms of identification and a Social Security number. You can claim prizes of $600 or less at a participating retail store. You can also file a claim by mail. You would need to mail your signed ticket to the state's lottery office, which should be done by registered mail to ensure it arrives and is secured.

Paying Taxes

Lottery winnings are considered taxable income. Winners must pay taxes, even nonresident aliens. State lotteries are obligated to automatically take out tax on amounts larger than $5,000 before making the payment. The tax rate is based on the individual's citizenship status. In Illinois, for instance, the lottery office takes out 25 percent of the money if the winner is a U.S. citizen or permanent resident, and 30 percent if the individual is a nonresident alien. You would have to pay a state tax as well, but this rate will depend on the state. You might have additional taxes depending on your particular situation.

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