The Powerball jackpot has reached a staggering $1.23 billion after no winning tickets were sold in the latest draw. The eventual winner will have the choice of receiving the prize over 30 annual payments or a lump sum cash award, with the lump sum currently standing at $595.1 million.
However, if the winner chooses the lump sum payout, their prize amount will drop significantly after a mandatory federal tax withholding of 24%. Depending on their taxable income, the winner could face a federal marginal tax rate as high as 37%, further reducing their winnings to around $375 million.
Alternatively, if the winner opts for the annual payments, their yearly installment of $41 million will decrease to $25.8 million after the federal marginal rate is applied. The state of residence of the winner will also impact their take-home amount, as some states do not tax lottery winnings while others impose varying tax rates ranging from 5% to 10.9%.
This record-breaking jackpot is now the biggest lottery prize of the year, surpassing the $1.13 billion Mega Millions prize claimed by a ticket holder from New Jersey. The Powerball lottery has not seen a major winner since New Year’s Day, when a player from Michigan won an $842.4 million jackpot.
The odds of winning the billion-dollar Powerball jackpot are incredibly slim, with a 1-in-292.2 million chance of selecting the correct numbers. This is only slightly better than the odds of winning the Mega Millions jackpot, which stand at 1-in-302.6 million.
The next draw for the Powerball jackpot is scheduled for Saturday night, giving players another chance to try their luck at claiming the massive prize. The largest jackpot in Powerball and U.S. history was $2.04 billion, won by a ticket holder from California in November 2022. The current $1.23 billion jackpot is the fourth-largest in Powerball history and the eighth-largest overall.
For more information on how lottery winners are taxed and how much they can expect to take home after taxes, readers can refer to previous articles on billion-dollar jackpot prizes claimed in New Jersey and the calculation of potential winnings after taxes for Powerball jackpot winners.
