$2.04 Billion Powerball Lottery Jackpot Winner Will Have a Massive Tax Bill

The $2.04 billion-dollar Powerball jackpot has its big winner and the federal government will get a big chunk of the prize from taxes.

money blowing in blue sky
(Image credit: Getty Images)

On November 8, Powerball announced that a single winning $2.04 billion Powerball lottery jackpot ticket was sold in Altadena, California. That means that someone out there matched all six numbers from the November 7 world record Powerball drawing. The lucky ticket holder won the largest jackpot in Powerball history and the largest jackpot in U.S. lottery history. But of course, due to taxes, the winner will also take home a lot less money than advertised.

The previous Powerball jackpot record was $1.586 billion, which was won by three ticket holders in 2016. The largest Mega Millions lottery jackpot to date, of $1.537 billion, was won by a sole winner in 2018. 

The odds of winning the $2.04 billion November 7 Powerball jackpot were about one in 292.2 million. Since August, there had been 40 drawings in a row with no grand prize winner. But, lottery officials also point out that the Powerball has been hit seven times so far this year. Most recently, on November 20, a Kansas ticketholder won the $92.9 million jackpot.

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So, all of that has a lot of people thinking about how much money a lucky multi-billion-dollar jackpot winner will take home—after taxes.

Who Won the November 7 Powerball $2.04 Billion Jackpot?

Powerball California Winner: We don't yet know who actually won the $2.04 billion Powerball jackpot from November. But Powerball lottery officials announced that a winning ticket was sold in California from the Monday, November 7 Powerball drawing. The winning Powerball numbers from that November 7 drawing were 10, 33, 41, 47, 56 and the Powerball was 10.

What is the Powerball Payout?

The advertised cash value of the Powerball lottery for the record-high November 7 drawing was $997.6 million.

Powerball Lump Sum Payout or Annuity?

Whoever wins the Powerball lottery jackpot, or another lottery prize, 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 twenty-nine 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 $2.04 billion is a bunch of money and $997.6 million is a lot of cash for the lump sum, the lucky Powerball lottery winner will also be looking at hefty 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 the 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%). For example, California is a state that doesn’t tax lottery winnings, so the lucky ticket holder from the $2.04 billion jackpot would only be looking at a hefty federal tax bill.

But in any case, (once applicable taxes are taken out) the amount of money that the Powerball jackpot winner will walk away with will be a lot less than the world record $2.04 billion that’s 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 the $2.04 billion Powerball jackpot, if the winner opted for the lump sum cash value of $997.6 million, they would be subject to federal income tax at the top tax rate, which is 37%. The lottery winnings for the $2.04 billion prize would be reported on the Powerball jackpot winner’s 2022 federal income tax return.

For 2022, 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, the federal income tax brackets for 2023 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 billion-dollar jackpot winner’s state taxes could still amount to a huge sum given the world record size of the Powerball lottery jackpot.

Can the California Powerball Winner Remain Anonymous?

The $2.04 billion Powerball winner won’t be able to stay anonymous. That’s because the winning Powerball ticket was sold in Altadena, California. California is a state that requires publicly disclosure of certain key lottery winner information (that includes the winner’s name).

But Powerball winners from other states may be able to stay anonymous. For example, the $92.9 million Powerball jackpot winner from Kansas can remain anonymous because Kansas is not required to release the names and addresses of lottery winners. 

Check the lottery rules in your state to be sure about whether you can remain anonymous if you win Powerball or another lottery.

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.

Kelley R. Taylor
Tax Editor, Kiplinger.com

With more than 20 years experience as an in-house legal counsel and business journalist, Kelley R. Taylor has contributed to numerous national print and digital magazines on key issues spanning education, law, health, finance, and tax. Kelley particularly enjoys translating complex information in ways that help empower people in their daily lives and work.