The Powerball jackpot prize grew to $559 million on Monday night after no tickets matched the winning numbers from the drawing, but the eventual winner will take home a significantly smaller amount after paying their taxes.
The Powerball jackpot rose to $559 million on Monday after no winning tickets emerged.
If a winner emerges in the next draw on Wednesday night, they will get to pick between receiving the $559 million jackpot amount spread across 30 annual payments or a lump sum cash prize of $273.3 million—the more popular choice.
The cash prize will drop to $207.7 million after a mandatory federal tax withholding of 24% is applied.
The winner may then face a federal marginal rate as high as 37%—depending on their taxable income for the year—cutting their winnings down to $172.2 million.
Under the installment route, the winner’s annual payments of $18.6 million could drop to $11.7 million, if the 37% federal marginal rate is applied.
The winner may face further taxes based on their state of residence, 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.
To win the jackpot, a Powerball ticket holder has to overcome extremely poor odds of 1-in-292.2 million. The Mega Millions jackpot in comparison has even more abysmal odds of 1-in-302.6 million.
The next draw for the Mega Millions jackpot will take place on Tuesday night with a jackpot prize of $735 million on the line. If a winner emerges on Tuesday, they will win the second biggest lottery prize of the year.