The Powerball lottery jackpot has crept up to a sizable $366 million ahead of Saturday night’s draw, but if you’re lucky enough to win, the amount you actually take home is likely far less.
It depends on two factors: the type of payout you chose and the state you live in.
For the payout, you have two options: a lump sum paid out right away or an annuity spread over 30 years. With the annuity option, you’ll receive the full jackpot amount. With the lump-sum payout, you will receive 52% of the jackpot amount, according to calculations by lottery site usamega.com.
Many winners choose the lump-sum option since the money can be reinvested right away, even though it’s less money overall.
Beyond that, you also have to pay taxes. While state taxes vary, all winners pay an upfront federal withholding tax of 24% on the winnings. However, you’ll likely owe another 13%, since 37% is the top tax bracket for single filers who earn more than $578,125 in 2023.
The 8 states where you’d take home the most money after taxes
There are only eight states that don’t charge state taxes on lottery winnings, which means they offer the biggest payout:
- California
- Florida
- New Hampshire
- South Dakota
- Tennessee
- Texas
- Washington
- Wyoming
Residents in these states will take home the largest amount after taxes. For the annuity option, that’s $231,691,350, and for the lump sum, it’s $119,107,045.
In other states and districts, winners are subject to additional state taxes that range between 2.9% and 10.9%. Below are the five places with the highest possible tax rates on lottery winnings, according to usamega.com:
- New York: 10.9%
- New Jersey: 10.75%
- Washington, D.C.: 10.75%
- Oregon: 9.9%
- Minnesota: 9.85%
A lottery winner in New York would pay the most in taxes. For a $366 million jackpot, that works out to $191,797,350 for an annuity payout and $98,506,045 for the lump sum payout. That’s tens of millions of dollars less than what winners in states with no lottery taxes would receive.
Depending on where you live in New York state, you might even owe more. If you live in New York City, you’ll pay an additional withholding tax of 3.876%. If you live in Yonkers, you’ll pay an additional withholding tax of 1.477%.
The next draw is Saturday night at 10:59 ET. To win the jackpot, you must match all six numbers from the draw. You’ll need a lot of luck, too — the odds of winning the jackpot are 1 in 292,201,338.
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