A single winning ticket sold in California netted the record Powerball jackpot of $2.04 billion Monday night, the lottery said, although the lucky winner will have to pay a hefty tax bill and take home much less than the top prize — here’s how much .
Powerball lottery winners can choose between receiving the full prize as an annuity — a series of 30 payments paid over 29 years — or as a one-time payment.
The single payout is less than the advertised jackpot, which highlights the value of the annuity prize, but is the most popular option among winners, and Saturday’s cash prize is worth just under $998 million.
A mandatory 24% federal tax withholding on gambling winnings would immediately reduce that amount by about $240 million for a single prize winner, who would take home $758 million, though the IRS is far from done.
The top federal marginal rate is 37% and unless the winner has reduced their taxable income in some way – such as through large tax deductions such as charitable donations – they should expect to set aside another $129 million for federal taxes and the total prize will be be reduced to $629 million.
California doesn’t tax lottery winnings, so the winner won’t owe any additional local taxes unless they live out of state, in which case state and city taxes depend on where they live and eat up this amount.
A winner who opts for the annuity payment is expected to receive about $68 million per year, although this would be reduced to about $43 million by federal taxes and could be further reduced by state and city taxes, depending on where the winner is. lives.
The big prizes to be won in lottery jackpots have soared in recent years. Huge jackpots are a feature, not a bug, of the lottery design and the rules are structured in such a way that it is easier to win, but harder to win big. The Powerball had been drawn 41 times without a jackpot winner, the latest being in August, the lottery said, setting a record for longest run. The jackpot marks the largest in lottery history and the largest lottery prize in US history.
The odds of winning the lottery are slim, about 1 in 292.2 million, according to Powerball. They are not in favor of the players. By comparison, the odds of being struck by lightning in any given year are less than 1 in 1 million, according to the CDC, and the odds of being attacked and killed by a shark are about 1 in 4.3 million, according to Florida. Museum’s International Shark Attack file.
$1.59 billion. That’s the value of Powerball’s biggest jackpot before Saturday’s price grew to $1.6 billion. The award was split between three winners in California, Florida and Tennessee in January 2016. According to the lottery, this prize was the world record for the largest lottery jackpot.
What to watch out for
Wednesday’s Powerball jackpot has been reset to an estimated $20 million. The draw will be broadcast live at 10:59 PM ET from the Florida Lottery studio. The drawings will also be streamed live online at Powerball.com.
The amazing jackpot has even encouraged more people than usual to try their luck. According to the lottery, there have been numerous reports of residents from nonparticipating states — Utah, Nevada, Hawaii, Alaska and Alabama — traveling across state lines to enter. The high demand caused problems with one lottery processing its sales and delayed the draw by several hours and caused some confusion about whether the jackpot had been won (initial reports incorrectly suggested that the jackpot had moved up to $2.3 billion). The prize even caught the attention of international gamblers, the lottery said, and hundreds of thousands of Australians reportedly bought tickets to enter Monday’s draw.
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