Topline
The Powerball jackpot rose to an estimated $1.25 billion after no winners were drawn on Monday night, the lottery’s sixth-largest prize ever, though a lucky winner would receive significantly less of that amount after paying required taxes.
The prize is Powerball’s sixth-largest ever.
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Key Facts
A ticket holder matching all five white balls and a red Powerball for the jackpot can choose between a payout over 30 annualized payments or a one-time lump sum cash payout of roughly $572.1 million.
The lump sum payment, typically the more popular option, would be reduced to $434.7 million after a mandatory 24% federal tax withholding.
A federal marginal rate as high as 37%, depending on the winner’s taxable income and other tax deductions, would cut the winnings down to $360.4 million.
Annual installments would average $26.2 million at a 37% federal rate.
Some states require additional taxes on lottery prizes, with rates as high as 10.9% in New York ($62.3 million) to as low as 2.5% ($14.3 million) in Arizona, though other states like California and Florida don’t tax winnings.
What To Watch For
The next Powerball drawing will be held Wednesday night. Mega Millions will hold its next drawing Tuesday night for an $80 million jackpot, and the $36.2 million cash option would be lowered to $27.5 million after a 24% federal tax withholding, or to $22.8 million with a marginal rate as high as 37%.
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