Hit the jackpot, meet the taxman.
The Powerball jackpot has skyrocketed to an astonishing estimated $1.8 billion — but the fortunate winner will need to pay millions in taxes before enjoying the mammoth prize.
Saturday’s draw, marking the second-largest in US history, is prompting hopefuls to dream of cashing in; however, even if someone wins, a substantial portion will go directly to taxes, leaving the winner with significantly less than the advertised jackpot.
Lotto winners forfeit at least 24% of the grand prize to federal income taxes — which means Saturday’s jackpot winner could owe a hefty $198.3 million, as reported by CNBC.
Furthermore, the massive earnings will push the fortunate winner into a 37% federal tax bracket, leading to even more deductions on top of any state taxes that could be applicable based on their location.
In New York, lottery winnings are taxed at 10.9%, according to the New York Lottery guidelines.
In 2025, individuals earning more than $626,350 and married couples with income over $751,600 fall into the 37% federal tax bracket.
Upon winning, recipients can decide to claim their prize in either of two manners: a one-time lump sum payment or an annuity, with an initial payout followed by 29 yearly payments, increasing by 5% annually.
The winner of Saturday’s jackpot — a 1-in-292 million chance — selecting the lump sum would receive approximately $826.4 million, while the annuity alternative is valued at $1.80 billion, according to the outlet.
Experts recommend the annuity for the full jackpot and three decades of steady payments, but most ticket holders prefer the one-and-done payday.
No one has clinched a Powerball win since May 31, making way for an enviable prize that keeps stacking up.
The highest-ever payout was $2.04 billion in 2022.
The next Powerball drawing happens live on Saturday at 10:59 p.m. ET.
