The Powerball jackpot has now exceeded $700 million, reaching a staggering $716 million after another drawing failed to produce a winner. However, the actual amount a winner might take home could be considerably less.
The latest estimated cash option stands at about $307.2 million, but this follows a stretch of 32 draws without a jackpot winner as of Monday.
If someone hits the jackpot, they can choose between receiving the money all at once—known as a lump sum—or in annual payments.
It’s important to note that if the lump sum is selected, the winner won’t actually take home the full $307.2 million.
An automatic federal tax withholding of 24% is applied, which deducts around $73.7 million, leaving a net amount of about $233.5 million, according to recent reports. But, that’s not the end of the taxes.
An additional 13% federal tax will further reduce the winnings to approximately $193.5 million.
There can be even more deductions depending on the winner’s state of residence.
For example, if someone from Florida wins, they’ll enjoy the benefit of no state tax on their prize. There are also other states like California, New Hampshire, South Dakota, Tennessee, and Texas where winners won’t face state taxes. Washington and Wyoming fall under this category as well.
On the flip side, New York has the highest state tax rate at 10.9%, and if a winner is from New York City, they face an additional municipal tax of 3.876%.
Those who choose installments for their winnings will see less aggressive tax deductions. For instance, an annual payout that starts at about $23.9 million would drop to around $15 million after taxes.
This past Monday’s Powerball numbers were 18, 26, 49, 50, 54, and the Powerball was 1, with the Power Play set at 3x. Unfortunately, no one was able to win the $691 million jackpot, although there were ticket holders from Florida and Georgia who each won $1 million.
Interestingly, Powerball is available to players in the UK, but jackpot winners there cannot opt for a lump sum payout. The UK jackpot has rolled over to £379 million, or roughly $505.2 million, for Wednesday’s drawing, and those winners would receive their prize over a period of 30 years.
This makes the UK prize appear smaller since the figures presented are post-tax.
The Powerball jackpot has not been won since a ticket worth $1.04 billion was purchased at a Hy-Vee Fast and Fresh in Quincy, Illinois, just before the August 12 draw. That winning ticket was claimed in September, and the claimant, who chose to remain anonymous, took the lump sum, estimated at $450.5 million.
