My wife won a big amount and reported it upon payout. Lottery Commission took out the withholding at her request. We had to report it on the annual income tax both state and fed. So whether you have withholding or not, you still have to report it because the Lottery Commission will file with IRS and CT DRS. At tax filing time you'll know whether you had enough withholding or not enough (pay or refund that is for that tax liability).