The Mega Millions jackpot climbed to a mouth-watering $525 million Wednesday morning, after no successful tickets were drawn Tuesday night, making the jackpot the 12th biggest in the history of the game, though a lucky winner would see less than half of that amount after federal taxes are deducted.
The Mega Millions jackpot surged to $525 million Wednesday morning, making it the 12th biggest in ... [+]
A lucky ticket holder who matches all five white balls and one “megaball” to claim the grand prize would have the choice of receiving the massive payout in 30 annual installments or as a one-time lump sum of $247.1 million, by far the more popular option among lottery winners.
Under the lump sum route, the winner’s payout would be reduced by a mandatory 24% federal tax withholding, cutting the prize to just under $187.8 million, while a federal marginal rate as high as 37%—depending on the winner’s taxable income and other tax deductions—could bring it down to just over $155.6 million.
If the winner opts for the annual installments, a full 37% federal marginal rate would reduce each payment to roughly $11 million.
State taxes could cut even more out of the grand prize, though not every state taxes lottery winnings.
One in 302 million. Those are the astronomical odds of winning the Mega Millions, a longshot possibility put even further out of reach after a change in the game’s rules in 2017 aimed at driving up the size of the jackpot. That change altered the formula required to win, increasing the pool of white balls to choose from and making it harder to win the grand prize. The odds of winning the jackpot were one in 258.9 million before the rules change. Since that change was implemented, the size of the jackpot has grown substantially, with seven of the 10 biggest Mega Millions jackpots drawn since 2017.
The next Mega Millions drawing is slated for 11 p.m. on Friday. The Powerball, which has a jackpot of $348 million and a pre-tax cash option of $164.3 million, will be drawn at 11 p.m. Wednesday.
A man in Washington D.C. sued the Powerball this week after he said he was told the winning numbers matching a ticket he bought for a $340 million jackpot were “mistakenly posted” by the lottery, multiple outlets reported. Plaintiff John Cheeks sued the Powerball for breach of contract, gross negligence and emotional distress, asking for $340 million in damages.
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