I've been spending the last hour hanging out with my wine and my H&R Block TaxCut (TM) (C) (R) (etc) software, and as I'm filing my state return, it asks me about my California state lottery winnings.
Here is my free tax advice to you:
If you won the lotto in 2010, do better than $35 on tax software. Get a real accountant to do your serious business taxes! If you're me, pay $35 for tax software and $14 for wine.