If Federal and State Taxes are paid at time of winning the lottery is the remaining amount taxed as earnings when filing annual tax return?

Answer 1

The gross amount of the winnings will be added to all of your other worldwide income on your 1040 tax form and will be subject to income taxes at your marginal tax rate.

You will get a credit on your income tax return for taxes that were withheld at the time that you received your winnings amount.

The entire amount won is taxed. The tax "withheld" - not actually paid per se, yet is an estimated deposit of the tax that will eventually be determined to be due. The actual total tax due to be paid by you on all your income may be more or less than these deposits/estimated tax, depending on your individual situation (and the accuracy of estimating both income, deductions and tax due). If the tax is more, the estimate is used as a partial payment and you pay the additional, if less the excess is refunded.