The Powerball jackpot rose to $1.09 billion—the second biggest lottery prize of the year so far—after no tickets matched the numbers drawn on Monday night, but the eventual winner will take home a smaller amount after paying their taxes.
The Powerball lottery prize jumped past a billion dollars after no winners emerged on Monday night.
If a winner emerges in the next draw, they will have a choice between receiving the $1.09 billion amount split across 30 annual payments or a lump sum cash award of $527.3 million—usually the popular choice.
If the cash reward is chosen, the prize amount will drop to $400.75 million after a mandatory federal tax withholding of 24% is applied.
Depending on their taxable income, the winner could face a federal marginal rate as high as 37%, further cutting the winnings to $332.2 million.
If the winner chooses the annual payments option, their yearly installment of 36.3 million will drop to $22.9 million if the 37% federal marginal rate is applied.
The winner’s state of residence will also impact their take-home amount as some states like Texas and California don’t tax lottery winnings, while others like New York and New Jersey levy between 5% to 10.9%.
A single ticket holder from New Jersey won the $1.13 billion Mega Millions jackpot last week, the biggest lottery prize of the year so far. The last Powerball winner emerged on New Year’s Day as a single ticket holder from Michigan won a $842.4 million jackpot—the second biggest of the year so far.
The next draw for the Powerball prize will take place on Wednesday night. If no winner emerges, the jackpot amount will almost certainly jump past last week’s big Mega Millions prize.
1-in-292.2 million. Those are the terrible odds a ticket buyer has to overcome to win the Powerball jackpot. This is only slightly better than the Mega Millions jackpot’s even worse odds of 1-in-302.6 million.