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.
A Powerball ticket is seen on a counter after being purchased in a store in Miami, Florida.
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.
- 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.
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.
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.
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.
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