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Sunday April 28, 2024

How much will Powerball Jackpot winner actually take home after taxes?

Powerball jackpot has reached $865 million, becoming fifth largest in games history

By Web Desk
March 26, 2024
Mega Million Lottery to hold drawing for $1.1 billion on Tuesday night. — CNN/File
Mega Million Lottery to hold drawing for $1.1 billion on Tuesday night. — CNN/File

After a winless Monday night, the Powerball jackpot has increased to an estimated $865 million, the fifth largest in the game's history, NPR.org reported.

It is the 36th consecutive drawing without a winner since January 1. The probability to win a Powerball jackpot is 1 in 292.2 million.

Before Powerball's next draw on Wednesday, another national lottery game, the Mega Million Lottery will hold a drawing for $1.1 billion on Tuesday night.

It is the biggest lottery game in the United States. The odds of winning it are 1-in-302.6 million.

Both the lotteries are played in 45 states across the United States as well as in Puerto Rico.

How much will the owner actually get?

If a winner emerges in the next draw, he/she has the option of receiving the total amount in 30 annual payments or lump sum cash $416.1 million at one go, Forbes reported.

If the second option is opted, the $416.1 million will get reduced to $316.2 million after a 24% federal tax cut.

After that the winner may face a federal marginal rate cut of 37% which may further cut the cash prize to $262.1 million.

If the winner opts for 30 annual payments, their yearly instalment will be reduced by a 37% federal marginal rate, reducing their instalment to $18.16 million.

Furthermore, the takeaway amount will also be affected by the state of residence which may levy additional taxes.