Many people are curious about how much money a Powerball winner will take home after taxes, especially with the increasing payout and record-high jackpot amounts like last year's $2.04 billion and this week's $1.08 billion. Despite the odds of winning being about one in 292.2 million, there have been frequent instances of single-winning tickets and the jackpot rolled for months. So, all eyes were on the July 19 drawing.
- The estimated payout for the Powerball drawing was $1.08 billion.
- According to Powerball, that was the third-largest Powerball jackpot and the seventh-largest U.S. lottery jackpot.
Which State Won the Powerball?
A single winning ticket sold in California won the $1.08 billion prize. This is the second time a massive Powerball jackpot-winning ticket was sold in California recently. (Late last year, a single California ticketholder won the World Record $2.04 billion jackpot.)
But, before diving into the details of the California winner's tax liabilities, let's review winning numbers and payouts.
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Powerball Numbers: Did Anyone Win the Powerball July 19?
A single California ticket won the massive Jackpot from the Wednesday, July 19 Powerball drawing. But check your tickets!
- Thirty-six tickets matched all five white balls to win $1 million prizes.
- There were also three $2 million winning tickets.
The winning numbers were: 7, 10, 11, 13, and 24, and the Powerball was 24.
To win the Powerball lottery jackpot, you need to match six numbers from the Powerball drawing. The Powerball drawing takes place every Monday, Wednesday, and Saturday at 10:59 p.m. ET.
You can find the winning numbers from the last drawing on Powerball's website. If no one matches all six numbers, the Powerball rolls, and the jackpot amount increases.
How Much is the Powerball Payout?
The advertised cash value of the lottery changes with each drawing.
For example, a $1.08 billion Powerball jackpot had an estimated cash payout of $558.1 million.
Powerball Taxes: Lump Sum Payout or Annuity?
If anyone wins the Powerball or another lottery prize, they can choose to receive the payout in one of two ways.
- They can receive the payout as an annuity, which would be paid in thirty graduated payments over 29 years, or
- They can receive the money in a lump sum payment.
Most lottery winners choose the lump sum payout.
In either case, while billions of dollars (as in the case of the most recent $1.08 billion jackpot) is a bunch of money and $558.1 million (the cash value of that jackpot) is a huge lump sum, any lucky lottery winner will also be looking at significant tax bills.
One of those tax bills will be from the federal government and, depending on where a winner lives, another could come from the state. The amount of tax a winner will have to pay will depend on factors including the payout option that the winner chooses and the applicable state tax rate.
That’s because some states don’t tax lottery winnings. (In the case of the July 19 jackpot, the winning ticket is from California, which doesn't tax lottery winnings.) Other states have tax rates for lottery winnings that generally range from about 3% to almost 11%.
But in any case, once applicable taxes are taken out, the amount of money that any jackpot winner would walk away with will be much less than the multi-millions splashed across lottery news headlines.
Taxes on Powerball: How Much Do You Pay?
If you’re the lucky winner of a massive jackpot or other lottery cash prizes from a Powerball or Mega Millions drawing, you will want to take a couple of deep breaths and secure and protect your winning ticket. Then, you will likely want to work with a qualified financial advisor to consider and plan for the various tax implications of winning the lottery.
That's because when anyone wins the lottery, the IRS withholds 24% of the winnings off the top. With a really large jackpot, if the winner opted for the lump sum cash value, they would be subject to federal income tax at the top tax rate, which is 37%. (So after the 24% off the top, that another 13% for some winners in remaining federal taxes).
For 2023, the top (i.e., 37%) federal income tax bracket applies to single filers who have more than $539,900 in income and joint filers with income over $647,850. Due to inflation, federal income tax brackets have been adjusted upward.
On the state side of things, most states treat lottery winnings as income for tax purposes and the tax rates vary by state. But the jackpot winner’s state taxes could still amount to a huge sum given the size of the most recent Powerball lottery jackpot.
Powerball Drawing Days
Powerball drawing days are every Monday, Wednesday, and Saturday at 10:59 p.m. ET.
How Much Does a Powerball Ticket Cost?
Tickets are $2 per play. Powerball tickets are sold in 45 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.
Alabama, Alaska, Hawaii, Nevada, and Utah are the five states that don't participate in Powerball.
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