Powerball jackpot at $900 million; winner's take-home amount after taxes

The Powerball jackpot has reached a staggering $900 million, making it the seventh largest in U.S. history. However, the actual amount that the winner will take home will be significantly less due to taxes. The winner has the option to receive the $900 million in 30 annual installments over 29 years or take a pretax lump sum payment of $465.1 million in cash.

If the winner chooses the lump sum option, a mandatory federal 24% tax withholding would reduce the earnings to $353.5 million. Depending on the winner's taxable income this year, a federal marginal tax rate of up to 37% could further reduce the amount to as low as $293 million. Additionally, some states, such as Arizona and New York, impose additional taxes on lottery winnings.

If the winner decides to receive the annual installments, the payments would average about $30 million per year for the next three decades. However, after accounting for federal taxes, the payouts could drop as low as $18.9 million, assuming there are no changes to the top marginal tax rate.

In the latest drawing, three tickets won $1 million each, with two in Texas and one in Colorado. Additionally, 89 tickets won either $50,000 or $100,000 prizes.

The odds of winning the Powerball jackpot are 1-in-292.2 million, as players need to match the numbers of all five white balls and the red Powerball.

This jackpot is the third largest in Powerball's history, following a $1.6 billion jackpot in 2016 and a $2 billion jackpot in November 2022. The last time a Powerball jackpot was won was on April 19. Since then, there have been 37 consecutive drawings without a winner.

Both Powerball and Mega Millions have seen their jackpots increase significantly. For the first time in two-and-a-half years, both lotteries surpassed the $500 million threshold together. Mega Millions currently has a jackpot of $640 million, with a cash option of $328 million before taxes.

It is worth noting that both lotteries have made their odds worse in recent years, resulting in fewer jackpot winners but larger total prizes.


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