Topline
The Powerball jackpot climbed to $750 million after no winning ticket emerged following Wednesday night’s draw, but the eventual winner will take home a smaller amount after paying their taxes.
Key Facts
If a winner is found in the next draw, they will get to pick between receiving the $750 million jackpot split over 30 annual payments or a lump sum cash prize of $357.3 million—usually the popular choice.
The lump sum prize drops to $271.5 million after a mandatory federal tax withholding of 24% is applied.
Depending on their taxable income, the winner could then face a federal marginal rate as high as 37%, cutting their winnings further to $225.1 million.
If the winner picks the annual payments route, their yearly installment of $25 million drops to $15.75 million if the 37% federal marginal rate is applied.
The winner’s state of residence will also impact the amount they take home as some states like Texas and California don’t tax lottery winnings, while others like New York deduct 10.9%.
What To Watch For
The Mega Millions lottery is on the verge of crossing $1 billion with a draw for a $977 million prize scheduled for Friday night. If no winner emerges in that draw, the Mega Millions prize will likely grow to become the first billion-dollar prize of the year. The next draw for the Powerball lottery will take place Saturday night.
Big Number
1-in-292.2 million. Those are the astronomical odds a ticket-holder will have to overcome to win the Powerball prize. The Mega Millions jackpot has even poorer odds of 1-in-302.6 million.
Further Reading
Mega Millions Jackpot Nears $1 Billion—Here’s How Much A Winner Could Take Home After Taxes (Forbes)
