The Mega Millions jackpot surged to an estimated $1.25 billion—the fifth largest in U.S. history—after no tickets matched all six numbers drawn on Tuesday night, although the winner of the prize will receive a far smaller payout after their tax bill.
The Mega Millions lottery jackpot has ballooned to $1.25 billion after Tuesday's drawing.
If there is a winner in the next draw, they can choose between a $1.25 billion payout spread over 30 annual installments or a lump sum amount of $625.3 million—usually the more popular choice.
The lump sum payment will first face a mandatory federal tax withholding of 24%, leaving the winner with $475.22 million.
Depending on the winner’s taxable income, they could face a federal marginal rate as high as 37%, which would further drop their winnings to around $394 million.
If the winner picks the installments option, the annual payments of around $41.6 million could drop as low as $26.2 million, if the 37% federal marginal rate is applied.
The amount the winner takes home will also be determined by their state’s policies, as some states like New York tax lottery winnings at 10.9%, while others like Texas, Florida and California don’t tax them at all.
The next drawing for the Mega Millions jackpot is scheduled for Friday at 11 p.m. ET.
$1.537 billion. That is the size of the largest ever Mega Millions jackpot winning and it was claimed in 2018 by a single ticket holder in South Carolina. The largest jackpot in U.S. history was a $2.04 Billion Powerball prize claimed by a ticket buyer from California last year.