Oregon generally taxes Oregon Lottery winnings as income. However, Oregon allows a subtraction for Oregon Lottery winnings of $600 or less from a single ticket or play. If the winnings from a single ticket or play are more than $600, the entire amount is taxable for Oregon income tax purposes.
'Oregon Lottery' means all games offered by the Oregon State Lottery commission and purchased in Oregon, including games jointly administered by Oregon and other states (such as Powerball).
Tax Treatment of Oregon Lottery Winnings
- $600 or Less: Oregon Lottery winnings of $600 or less from a single ticket or play may be subtracted from Oregon taxable income.
- More Than $600: If winnings from a single ticket or play exceed $600, the entire amount is taxable in Oregon.
- Per-Ticket or Per-Play Rule: The $600 threshold applies separately to each ticket or play. It isn't an annual threshold for all Oregon Lottery winnings.
- Federal Income: Oregon Lottery winnings that are included in federal income are generally included in Oregon income before applying the applicable Oregon subtraction.
- Other Gambling Winnings: The $600 Oregon Lottery subtraction doesn't generally apply to gambling winnings from other sources, such as casino or tribal gaming winnings.
Nonresident Treatment
Oregon Lottery winnings are also subject to Oregon taxation for nonresidents when the winnings are Oregon-source income. However, qualifying Oregon Lottery winnings of $600 or less per ticket or play may be subtracted under Oregon's specific Oregon Lottery subtraction rule.
Oregon Lottery Withholding
Oregon may require state income tax withholding from certain Oregon Lottery winnings. Taxpayers should review the applicable Oregon Lottery withholding rules and their Form W-2G or other gambling-income reporting documents when preparing their Oregon return.
Important Notes
- The $600 threshold applies to each ticket or play, not the taxpayer's total annual winnings.
- If a single Oregon Lottery ticket or play produces winnings of more than $600, the full winnings, rather than only the amount above $600, are taxable.
- The Oregon Lottery subtraction is separate from the federal rules governing gambling income and gambling losses.
- Taxpayers should use the current Oregon Department of Revenue instructions for the applicable tax year when determining the subtraction and reporting requirements.
Source:
2025 Oregon Publication OR-17 – Oregon Department of Revenue
Disclaimer: Always verify with the official Oregon Department of Revenue forms and instructions for the current tax year. Tax rules may change, and individual circumstances may require professional advice from a CPA or tax attorney.