But the jackpot winner’s state taxes could still amount to a huge sum given the size of the most recent Powerball lottery jackpot. On the state side, most states treat lottery winnings as income for tax purposes and the tax rates vary by state. Due to inflation, federal income tax brackets have been adjusted upward.

(So after the 24% off the top, that another 13% for some winners in remaining federal taxes).įor 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. 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%.

That's because when anyone wins the lottery, the IRS withholds 24% of the winnings off the top.

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. If you’re the lucky winner of a massive jackpot or 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. Powerball after taxes: How much do you take home? ( That's good news for the October California winner.) Meanwhile, other states have tax rates for lottery winnings that generally range from about 3% to almost 11%.īut in any case, once applicable taxes are taken out, the amount of money that any jackpot winner would walk away with will be much less than the multi-millions splashed across lottery news headlines. That’s because some states don’t tax lottery winnings. The amount of tax a winner will have to pay will depend on factors including the payout option that the winner chooses and the applicable state tax rate. One of those tax bills will be from the federal government and, depending on where a winner lives, another could come from the state. In either case, while billions of dollars (as in the case of the most recent winning $1.765 billion jackpot) is a bunch of money and $774.1 million (the cash value of that jackpot) is a huge lump sum, any lucky lottery winner will also be looking at significant tax bills. Most lottery winners choose the lump sum payout. They can receive the money in a lump sum payment.They can receive the payout as an annuity, which would be paid in thirty graduated payments over 29 years, or.If anyone wins the Powerball or another lottery prize, they can choose to receive the payout in one of two ways.

Powerball current jackpot value