Topline
The Powerball jackpot climbed to $1.4 billion–the fifth largest in U.S. history–after no tickets matched all six numbers drawn on Wednesday night, although the winner will end up with a much smaller amount after paying their tax bill.
Key Facts
If a winner emerges in the next draw, they can choose between a $1.4 billion payout spread over 30 annual installments or a lump sum amount of $643.7 million–usually the more popular choice.
The lump sum payout will drop to $489.2 million after a mandatory federal tax withholding of 24%.
Depending on their taxable income for the year, the winner could face a federal marginal rate of up to 37%, further slashing the amount to $405.5 million.
Under the installment route, the winner’s annual payments of around $46.66 million could drop to $29.4 million, if the 37% federal marginal rate is applied.
Depending on their state of residence, the winner could face further taxes, as some states like New York levy a 10.9% tax on lottery winnings, while others like Texas, Florida, and California don’t tax them at all.
Big Number
4. That is the total number of times that the lottery jackpot has risen past $1 billion in 2023. In comparison, the billion-dollar mark was breached only twice in 2022 and once in 2021.
Surprising Fact
The eventual winner of the Powerball jackpot will have to overcome pretty abysmal odds of 1-in-292.2 million. However, that is not as bad as the Mega Millions jackpot’s 1-in-302.6 million odds.
What To Watch For
The next drawing for the Powerball jackpot will take place on Saturday night. The Mega Millions Jackpot currently stands at $350 million and will have its next drawing on Friday.
Key Background
The $1.4 billion jackpot is the second biggest so far this year and the third biggest in Powerball’s history. In August, a single ticket sold in Florida won the $1.6 billion Mega Millions jackpot–the largest prize so far this year. The Powerball and Mega Millions jackpots have crossed $1 billion nine times and all of these instances occurred after 2016. Seven of the nine billion-dollar jackpots have taken place in the last three years. This is a result of a deliberate tweak to the formulas of the lotteries, which has severely worsened individual odds while raising jackpot sizes.
Further Reading
$1.58 Billion Mega Millions Winner Claims Jackpot–One Month Later (Forbes)
Here Are The Top 10 Lottery Jackpots Of All Time–As Mega Millions Reaches $910 Million (Forbes)