The Powerball jackpot reached $1.04 billion—the fourth largest in the history of the game and second largest this year—after no tickets aligned with the six numbers drawn on Saturday night, but the prize a potential winner will take home is significantly smaller.
Monday's Powerball drawing is for $1.04 billion — the fourth largest Powerball jackpot in history ... [+]
If the next draw produces a winning ticket, the winner will have their choice between a $1.04 billion payout over 30 years or a lump sum payment estimated at $478.2 million.
A 24% federal tax withholding is taken right away, dropping the lump sum estimate to about $363.4 million.
Because the federal government counts lottery winnings as income, the winner could be moved into a tax bracket facing a tax rate as high as 37%, which could drop the lump sum to around $301.3 million.
If someone wins this round and chooses to receive the winnings in installments, the average annual payments of around $34.67 million could drop as low as $21.8 million if the 37% top federal marginal rate is applied.
State taxes will also play a role in the final take-home amount: Some states like New York tax lottery winnings at 10.9%, while others like Texas and Florida don’t tax them.
The next drawing will take place Monday night.
- That’s how many consecutive drawings there have been without a grand prize winner, according to Powerball. The last Powerball jackpot—which was $1.08 billion—was won on July 19, marking the sixth-largest lottery prize in U.S. history.
Though the odds of winning a prize in Powerball aren’t horrible—1-in-24.9—the odds of winning this Powerball jackpot are not great, at 1-in-292.2 million. Both the Powerball and Mega Millions have worsened the odds of winning a jackpot, leading to larger prizes as it often takes weeks or months to select a winning ticket.
Though no one took home the jackpot in Saturday’s drawing, there were a handful of winners—more than 2.5 million, actually. Five tickets won $1 million prizes, and two other tickets won $2 million. Earlier in the week, 55 tickets won $50,000 prizes.