The California State Lottery Act of 1984 was passed to generate additional funds for education without having to raise taxes. The CA Lottery must pay a minimum amount of 34% of the State Lotteries funds towards public schools and other income provided by the state of California. Another 50% of the California Lottery revenues must be paid to the public in the form of prizes, making a mandated minimum of 84% of all funds that must be given back to the public in the form of prizes or funds for public education. The remainder, a maximum of 16%, was to be spent on administration, such as salaries and running the CA Lottery games. Please visit www.CALottery.com for more information about the California State Lottery.
All California Lottery prizes for state lottery drawings, and non-jackpot SuperLotto Plus, Powerball, and Mega Millions prizes, are paid out in one payment, less 25% or 33%. Federal withholding if the prize is over $5,000. Merchandise prizes over $5,000 are subject to 33% Federal withholding. Scratch-Off lottery tickets are generally one-payment prizes; however, some games have annuity options for payments each year, or per week. California does not tax California Lottery winnings, however it taxes lottery winnings from other jurisdictions. For SuperLotto Plus and Mega Millions jackpots, the player may choose a single cash payout for a floating percentage of the jackpot, or an annuity. The Super Lotto Plus and Powerball annuity payment schedule is on a graduated basis over 30 annual payments, whereas payments in the Mega Millions annuity are the same every year over 26 annual payments. Until 2005, when California joined Mega Millions, the payment choice on CA Lottery SuperLotto Plus had to be made when the ticket was bought. Since then, there is a 60-day window after winning, in which the choice of cash or annuity is to be made.