The Powerball jackpot prize jumped to $600 million after no tickets matched all six winning numbers drawn on Wednesday night, but the final winner will take home a much smaller amount after making their tax payments.
File Photo: The Powerball jackpot has surged to $600 million.
If a winner emerges in the next drawing, they will have a choice between receiving the $600 million jackpot spread across 30 annual installments or a lump sum prize of $293.4 million—often the popular pick.
The cash prize amount will drop to around $223 million after a mandatory federal tax withholding of 24% is deducted.
Depending on the winner’s final taxable income, they may face up to a 37% federal marginal rate—further cutting down their fortune to $184.8 million.
If the winner chooses the annual payments option, their yearly installments of $20 million would drop to $12.6 million if the 37% federal marginal rate is applied.
The winner’s state of residence will also impact their earnings as some states like New York tax lottery winnings at 10.9% while others like Texas, Florida, and California don’t tax them at all.
The next drawing for the Powerball lottery will take place on Saturday night. On Friday, the Mega Millions lottery will hold a drawing for a $792 million jackpot prize—its biggest of the year so far.
A person’s chances of winning the Powerball fortune remain astronomically as a ticket buyer will need to overcome odds of 1-in-292.2 million. This is only slightly better than the Mega Millions abysmal jackpot-winning odds of 1-in-302.6 million.
Mega Millions Jackpot Nears $800 Million—Here’s How Much The Winner Will Take Home After Taxes (Forbes)