Mega Millions Jackpot Reaches $1.1 Billion: Here Is How The Winner Would Benefit Once Taxes Have Been Considered
Mega Millions jackpot has grown to an estimated $1.1 billion – its fifth-highest prize pool ever after no winning tickets were drawn Friday evening; though an unlucky winner–facing one in 302-million odds–would only receive half after taxes are deducted from winning amount.
Key Facts
Anyone matching all five white balls and one “megaball” for the grand prize has two payout options for their grand prize: either thirty annual installments of $156.6 Million over 30 years or one one-time lump sum payment totaling $525.8 million.
Tax withholding would reduce this lump sum to $399.6 million; depending on taxable income and deductions available to them, federal marginal rates of up to 37% could further diminish their earnings and bring them down to approximately $331.2 million.
An average annual installment amounting to an estimated $23.1 Million would pay out with an effective federal marginal rate of 37%.
Tax rates on lottery winnings in some states range from 10.9% in New York ($57.3 million), down to 2.5% in Arizona and as low as zero % for California or Texas; although winnings from casinos do not incur taxes.
Surprising Fact
Mega Millions has seen five grand prizes of at least $1.3 billion over its history; each was won with $1.35 billion being the seventh-highest U.S. jackpot ever won! As for today’s jackpot prize of $850 Millions it represents eighth on this list as it follows closely on from that won last year for seventh-place in U.S. lottery history history.
BIG NUMBER
Friday night saw 2.5 million non-jackpot-winning tickets being drawn, including six that matched all five white balls for $1 million prizes. Since December’s Mega Millions jackpot win, over 26.2 million non-jackpot-winning tickets have been drawn.
What to Expect Mega Millions’ next drawing will take place Tuesday at 11 p.m. EDT while Powerball holds theirs Saturday for a $750 million jackpot prize pool that starts with a lump sum option worth an estimated $368 Million which could be reduced further with mandatory tax withholding at 24% or subject to up to 37% federal marginal rates based on how they’re taxed at distribution.