Powerball’s $700 Million Jackpot Is the Fifth-Largest Ever—Here’s How Much You’d Take Home After Taxes – NBC New York

Now worth $700 million, the fifth-largest Powerball lottery jackpot in history has yet to be claimed ahead of the next draw on Wednesday.

Without a winner, the jackpot prize has grown in recent weeks. The all-time record jackpot is $1.586 billion, which was won in 2016. Here’s a look at the top 10 prizes of all time:

  1. $1.586 billion: Jan. 13, 2016
  2. $768.4 million: March 27, 2019
  3. $758.7 million: Aug. 23, 2017
  4. $731.1 million: Jan. 20, 2021
  5. $700 million (estimated): Oct. 26, 2022
  6. $699.8 million: Oct. 4, 2021
  7. $687.8 million: Oct. 27, 2018
  8. $632.6 million: Jan. 5, 2022
  9. $590.5 million: May 18, 2013
  10. $587.5 million: Nov. 28, 2012

Winning the jackpot requires a ticket with six matching numbers from the draw. That works out to a 1 in 292,201,338 chance of claiming it.

How much you’d actually take home after taxes

The exact amount you win varies based on two payout options:

Despite the much lower payout, many winners chose the lump sum option since it can be invested right away. This allows winners to grow their money through compound interest over a longer period of time.

Either way, Powerball suggests consulting a financial expert before you decide which option is best for you.

Whatever option you chose, you’ll be obligated to pay taxes on your lottery winnings.

All winners must pay automatic federal withholding taxes of 24%. But since you’d be winning millions of dollars, you’d almost certainly have to pay the top federal income tax rate of 37%, which would be owed against your winnings when you file a 2022 tax return.

And most states tax lottery winnings as income. Of those that do, the state tax rate is typically between 3% and 8%.

In New York state — which has the highest state tax of 8.82% — you’d take home either $187,559,240 for the lump sum payout or $379,260,000 for the annuity, per Powerball’s calculations.

If you live in a state that does not tax winnings, you’d bring home the highest possible payout: Either $218,092,140 for the lump sum payout, or $441,000,000 for the annuity, per Powerball’s calculations.

Here are the eight states that don’t charge state taxes on lottery winnings:

  1. California
  2. Florida
  3. New Hampshire
  4. South Dakota
  5. Tennessee
  6. Texas
  7. Washington
  8. Wyoming

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