Topline
The Powerball jackpot jumped to $526 million—the third biggest lottery prize of the year so far—after no tickets matched all six numbers drawn on Wednesday night, although the eventual winner will take home a much smaller payout after taxes and deductions.
Key Facts
If there’s a winner in the next draw, they will get to choose between receiving the $526 million split across 30 annual installments or a one-time cash payout of $233.5 million—the preferred option for most winners.
If the winner chooses the cash prize, their winnings will first drop to about $177.46 million after a mandatory 24% federal withholding tax is applied.
They would then likely face a federal marginal rate as high as 37%, depending on their taxable income, further reducing the winnings to around $147.1 million.
If the installment option is picked, the winner’s annual payouts of around $17.5 million will drop to around $11 million after the 37% federal marginal rate is applied.
Depending on where they live, the winner could face additional taxes, as some states, such as New York, tax lottery winnings at 10.9%, while others, such as Texas, Florida, and California, don’t.
What To Watch For?
The next Powerball drawing is set to take place on Saturday night. A day before that, Mega Millions is set to hold its next drawing for a jackpot that has swollen to $672 million.
Big Number
1-in-292.2 million. Those are the astronomical odds a Powerball ticket buyer will need to overcome to win the jackpot. This is even worse than the Mega Millions jackpot’s already poor odds of 1-in-290.4 million.
Key Background
Only two other lottery prizes have crossed the $500 million mark so far this year. The first was a $533 million jackpot won by a Mega Millions ticket buyer from Illinois in March, which is the biggest prize claimed so far. The other is the ongoing Mega Millions jackpot, which has risen to $672 million—with no winner yet. The biggest claimed Powerball jackpot of the year so far is a $250.8 million prize won by a lottery player from Arkansas.
further reading
Mega Millions Jackpot Rises To $672 Million—Here’s What The Winner Could Take Home (Forbes)
