The Powerball jackpot climbed to $521 million after no tickets matched all six numbers drawn on Wednesday night, but the eventual winner will take home a much smaller amount after paying their tax bill.
File Photo: No one has won the Powerball since New Year's Day when a single ticketholder won a ... [+]
If a winner is found in the next draw, they will get to choose between receiving the $521 million spread over 30 annual installments or a lump sum cash payment of $249.6 million—usually the popular choice.
The lump sum payout drops to $189.7 million after a mandatory federal tax withholding of 24% is applied.
Depending on their taxable income for the year, the winner may face a federal marginal rate as high as 37%, slashing the winnings further to $157.25 million.
If they pick the installment option, the winner’s annual payments of $17.36 million could drop to $10.93 million, if the 37% federal marginal rate is applied.
Depending on the winner’s state of residence, their winnings 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.
The next drawing for the Powerball jackpot will take place on Saturday night.
1-in-292.2 million. Those are the astronomical odds a Powerball ticket buyer will need to overcome to win the jackpot. This is only slightly better than the Mega Millions jackpot’s 1-in-302.6 million odds.
Mega Millions Jackpot Surges To $687 Million—Here’s How Much The Winner Will Take Home After Taxes (Forbes)