Powerball Jackpot Surges to $1.04 Billion: What's the Real Take-Home Prize After Taxes?
The Powerball jackpot has soared to an impressive $1.04 billion, making it the fourth-largest in the game's history and the second-largest this year. However, the actual prize money that the potential winner will pocket is considerably less.
Should a winner emerge in the upcoming draw, they'll face a choice: opt for a $1.04 billion payout spread over three decades or a one-time lump sum payment, which is currently estimated at $478.2 million.
Immediately, a federal tax withholding of 24% is applied, reducing the lump sum to roughly $363.4 million. Given that lottery winnings are classified as income by the federal government, the winner might find themselves in a higher tax bracket, potentially facing a tax rate of up to 37%. This could further reduce the lump sum to an estimated $301.3 million.
For winners who prefer the annuity option, the annual payments averaging about $34.67 million could be slashed to nearly $21.8 million, considering the top federal marginal rate of 37%.
State taxes will also influence the final amount. For instance, New York imposes a 10.9% tax on lottery winnings, while states like Texas and Florida have no such tax.
KEY POINTS TO NOTE:
- The next Powerball draw is scheduled for Monday night.
- The jackpot has rolled over 32 times without a grand prize winner, as per Powerball's records. The previous jackpot, amounting to $1.08 billion, was claimed on July 19, ranking as the sixth-largest lottery win in U.S. history.
- While the odds of securing a Powerball prize are relatively favorable at 1-in-24.9, the chances of clinching the jackpot are a daunting 1-in-292.2 million. Both Powerball and Mega Millions have made it more challenging to win the jackpot, resulting in heftier prizes due to the extended periods between jackpot wins.
ADDITIONAL INFO: In the most recent draw, although the jackpot remained unclaimed, over 2.5 million participants won prizes. Five tickets secured $1 million each, two others bagged $2 million, and earlier in the week, 55 tickets each won $50,000.
