The odds of winning the Powerball jackpot are generally about one in 292.2 million. But recent high jackpot amounts, (like $2.04 billion) and seemingly frequent single winning tickets has some people thinking about how much money a lucky multi-million-dollar Powerball jackpot winner will take home — after taxes that is.
Powerball Winning Numbers: Did Anyone Win the Powerball Jackpot?
Winning the Powerball lottery jackpot requires a ticket holder to match six numbers from the Powerball drawing. Powerball drawing days are every Monday, Wednesday, and Saturday at 10:59 p.m. ET.
The winning numbers from the last Powerball drawing can be found on Powerball's website. When no one matches all six numbers from a drawing, the Powerball rolls and the jackpot amount climbs.
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What is the Powerball Payout?
The advertised cash value of the Powerball lottery changes with each drawing.
For example, a $147 million Powerball jackpot has an estimated cash payout of $79.5 million.
Powerball Lump Sum Payout or Annuity?
If anyone wins the Powerball lottery jackpot, or another lottery prize, they can choose to receive the payout in one of two ways. They can receive the payout as an annuity, which would be paid in thirty graduated payments over 29 years, or they can receive the Powerball money in a lump sum payment. Most lottery winners choose the lump sum payout.
In either case, while billions of dollars (as in the case of the World Record Powerball jackpot) is a bunch of money and $997.6 million (the cash value on that jackpot) is a huge lump sum, any lucky Powerball lottery winner will also be looking at significant tax bills.
One of those tax bills will be from the federal government and, depending on where a Powerball winner lives, another could come from the state. The exact amount of tax that a winner will have to pay will depend on factors including the payout option that the winner chooses and the applicable state tax rate.
That’s because some states don’t tax lottery winnings. Other states that do have tax rates for lottery winnings that generally range from about 3% to almost 11%.
But in any case, once applicable taxes are taken out, the amount of money that any winner of the Powerball jackpot would walk away with will be a lot less than the multi-millions that are splashed across lottery news headlines.
How Much Do You Pay in Taxes on Powerball?
If you’re the lucky winner of a massive Powerball jackpot (or if you win other lottery cash prizes from a Powerball or Mega Millions drawing), you will want to take a couple of deep breaths and secure and protect your winning ticket. Then, you will likely want to work with a qualified financial advisor to consider and plan for the various tax implications of winning the lottery.
That's because when anyone wins the lottery, the IRS withholds 24% of the winnings off the top. With a really large jackpot, if the winner opted for the lump sum cash value, they would be subject to federal income tax at the top tax rate, which is 37%. (So after the 24% off the top, that another 13% for some winners in remaining federal taxes).
For 2023, the top (i.e., 37%) federal income tax bracket applies to single filers who have more than $539,900 in income and joint filers with income over $647,850. Due to inflation, federal income tax brackets have been adjusted upward.
On the state side of things, most states treat lottery winnings as income for tax purposes and the tax rates vary by state. But the jackpot winner’s state taxes could still amount to a huge sum given the size of the Powerball lottery jackpot.
Powerball Drawing Days
Powerball drawing days are every Monday, Wednesday, and Saturday at 10:59 p.m. ET. Tickets are $2 per play. Powerball tickets are sold in 45 states, and the District of Columbia, Puerto Rico and the U.S. Virgin Islands.
The five states that don’t participate in Powerball are Alabama, Alaska, Hawaii, Nevada, and Utah.
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