As Tuesday night’s Mega Millions drawing approaches, lottery fever is spreading across the U.S. The jackpot has swelled to $575 million, the ninth-largest in the game’s history.
Don't Miss:
- Can you guess how many retire with a $5,000,000 nest egg? – How does it compare to the average?
The odds — a mind-boggling 1 in 302,575,350. For perspective, you’re about 300 times more likely to be struck by lightning this year.
If lightning does strike and you match all six numbers, your first big decision is whether to take the lump sum or the annuity. The lump sum, estimated at $285.5 million for this drawing, is the popular choice. But it immediately slashes your winnings in half.
But before you start planning your private island getaway, there’s a sobering reality to consider: taxes.
The IRS automatically withholds 24% for federal taxes. But don’t be fooled — you’ll owe up to 37% come tax time, as your windfall launches you into the highest tax bracket.
Trending:
- Founder of Personal Capital and ex-CEO of PayPal re-engineers traditional banking with this new high-yield account — start saving better today.
State taxes further chip away at your newfound wealth. They range from nothing in tax-friendly states like Florida and Texas to 10.9% in New York.
So, what’s left after? Let’s break it down:
In California, Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming — states with no income tax on lottery winnings —you’d walk away with about $179.9 million if you chose the lump sum.
At the other end of the spectrum, New York residents face the steepest hit. After federal and state taxes, a New York winner would pocket “just” $148.8 million—still life-changing, but a far cry from the headline jackpot.
See Also:
- Amid the ongoing EV revolution, previously overlooked low-income communities now harbor a huge investment opportunity at just $500.
Most states fall somewhere in between. In Illinois, for instance, where the last Mega Millions jackpot was claimed in June, a winner would take home about $165.8 million after taxes.
According to CNBC, here's a look at the lump sum and annuity options for Powerball winners in various states:
- Arizona
- Lump sum: $172,769,312
- Annuity: $349,129,380
- Arkansas
- Lump sum: $168,772,312
- Annuity: $341,079,360
- California
- Lump sum: $179,906,812
- Annuity: $363,504,360
- Colorado
- Lump sum: $167,344,812
- Annuity: $338,204,370
- Connecticut
- Lump sum: $159,950,362
- Annuity: $323,311,860
- Delaware
- Lump sum: $161,063,812
- Annuity: $325,554,360
- Florida
- Lump sum: $179,906,812
- Annuity: $363,504,360
- Georgia
- Lump sum: $164,232,862
- Annuity: $331,936,860
- Idaho
- Lump sum: $163,647,587
- Annuity: $330,758,130
- Illinois
- Lump sum: $165,774,562
- Annuity: $335,041,860
- Indiana
- Lump sum: $171,199,062
- Annuity: $345,966,870
- Iowa
- Lump sum: $163,633,312
- Annuity: $330,729,360
- Kansas
- Lump sum: $163,633,312
- Annuity: $330,729,360
Kentucky - Lump sum: $168,486,812
- Annuity: $340,504,380
- Louisiana
- Lump sum: $166,345,562
- Annuity: $336,191,880
- Maine
- Lump sum: $159,493,562
- Annuity: $322,391,880
- Maryland
- Lump sum: $154,354,562
- Annuity: $312,041,880
- Massachusetts
- Lump sum: $154,211,812
- Annuity: $311,754,360
- Michigan
- Lump sum: $167,773,062
- Annuity: $339,066,870
- Minnesota
- Lump sum: $151,785,062
- Annuity: $306,866,880
- Mississippi
- Lump sum: $166,488,312
- Annuity: $336,479,370
- Missouri
- Lump sum: $165,774,562
- Annuity: $335,041,860
- Montana
- Lump sum: $163,062,312
- Annuity: $329,579,370
- Nebraska
- Lump sum: $163,233,612
- Annuity: $329,924,370
- New Hampshire
- Lump sum: $179,906,812
- Annuity: $363,504,360
- New Jersey
- Lump sum: $149,215,562
- Annuity: $301,691,880
- New Mexico
- Lump sum: $163,062,312
- Annuity: $329,579,370
- New York
- Lump sum: $148,787,312
- Annuity: $300,829,380
- North Carolina
- Lump sum: $167,059,312
- Annuity: $337,629,360
- North Dakota
- Lump sum: $171,627,312
- Annuity: $346,829,370
- Ohio
- Lump sum: $169,914,312
- Annuity: $343,379,370
- Oklahoma
- Lump sum: $166,345,562
- Annuity: $336,191,880
- Oregon
- Lump sum: $151,642,312
- Annuity: $306,579,360
- Pennsylvania
- Lump sum: $171,141,962
- Annuity: $345,851,880
- Rhode Island
- Lump sum: $162,805,362
- Annuity: $329,061,870
- South Carolina
- Lump sum: $161,634,812
- Annuity: $326,704,380
- South Dakota
- Lump sum: $179,906,812
- Annuity: $363,504,360
- Tennessee
- Lump sum: $179,906,812
- Annuity: $363,504,360
- Texas
- Lump sum: $179,906,812
- Annuity: $363,504,360
- Vermont
- Lump sum: $154,925,562
- Annuity: $313,191,870
- Virginia
- Lump sum: $163,490,562
- Annuity: $330,441,870
- Washington
- Lump sum: $179,906,812
- Annuity: $363,504,360
- Washington, D.C.
- Lump sum: $149,215,562
- Annuity: $301,691,880
- West Virginia
- Lump sum: $161,349,312
- Annuity: $326,129,370
- Wisconsin
- Lump sum: $158,066,062
- Annuity: $319,516,860
Despite the tax bite, interest in Mega Millions remains high. The game has seen only two jackpot winners so far in 2024, a contrast to 2023 when eight lucky tickets had hit the big time by this point in the year.
Trending:
- The number of ‘401(k)' Millionaires is up 43% from last year —Here are three ways to join the club.
As you stand in line for your ticket, remember: the house — in this case, the government — always wins. But with after-tax payouts still in the nine figures, it’s a game many will play.
Read More:
- Groundbreaking trading app with a ‘Buy-Now-Pay-Later' feature for stocks tackles the $644 billion margin lending market – here’s how to get equity in it with just $100
The Mega Millions drawing will be held Tuesday at 11 p.m. Eastern time.
Just don’t forget to set aside some of your winnings for the taxman.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
