Powerball's $1 Billion Jackpot Has a Winner: Here's What They Will Take Home
Powerball's Jackpot which climbed up to $1 billion with 38 consecutive drawings without a grand-prize winner finally has a winning ticket sold in California. This is the third-highest jackpot in the Powerball lottery's history, as reported by CNBC. However, as we all know, this is not the final amount the winner will take home. The final payout they choose will vary by millions of dollars and also if the state charges taxes on the winnings.
Payout options after winning the jackpot
The winner will have two payout options to choose from: The full amount coming in annually over the course of 30 years or an upfront payout. All winners will have to pay an upfront federal withholding of 24% on the winnings which will be considered as income. On top of this, there's an additional 13% in federal taxes which will be applicable when they file their tax returns. After this, the winner will be obligated to pay state income taxes which range from 2.9% to 10.9% depending on where the winner resides.
Fun fact: There are five states that don't participate in the Powerball's jackpot—Alabama, Alaska, Hawaii, Nevada, and Utah. There are also eight states that charge no taxes on lottery winnings—California, Florida, South Dakota, Tennesse, Texas, Washington, Wyoming, and New Hampshire, per CNBC.
Here is how much you have to pay depending on the state, assuming you have won the $1 billion jackpot and have to pay the maximum percentage of federal tax, which is 37%, per a PWC report.
Final payout, depending on the state
The final payment will vary depending on which state you live in. For example in Arizona, if you choose a lump sum, it will get you around $312,701,045 while an annual pay will get you $606,111,360. In California, with a lump sum payout, you can get $325,621,045 while the annual payment will get you $631,111,350 in total. Colorado's tax rates will allow you to take home $302,881,845 if you choose lump sum and $587,111,340 if you choose annual payment, while in Delaware you will be able to take $291,512,245 with the lump sum option and $565,111,350 with the annuity option.
In Florida, you can get $325,621,045 with lump sum and $631,111,350 with an annuity, while in Idaho you'll earn $295,646,645 in a lump sum and $573,111,360 in an annuity. In North Dakota, the winner can take home $310,633,845 with the upfront payment and $602,111,340 if they choose an annual payout. In Wyoming, the winner will earn $325,621,045 through a lump sum payout and $631,111,350 with annual payments. If the winner resides in Texas then they will be able to take home $325,621,045 if they choose the lump sum option and $631,111,350 if they opt for the annual payments.
The top two jackpots in the history of Powerball
The $2.04 billion Powerball jackpot was bagged by a winner in 2022 marking the fifth billion-plus winning amount in the history of the lottery. This particular winning prize was more than any lottery jackpot ever and holds a world record. The pre-tax lump sum amount for this payment was $997.6 million, as per CNBC. The second highest prize money ever recorded in the history of this lottery was $1.59 billion which was won by John and Lisa Robinson, residents of Tennessee.
In another recent news from the world of lottery, a mother and son, residents of North Carolina whose lives changed for the better when they won two lotteries in a span of one month. The son first claimed a grand prize of $369,627 only to be followed by another grand prize of $500,000 won by the mother.
Editor's note: This article was originally published on January 22, 2024. It has since been updated.
