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The Powerball jackpot has surged to a staggering $820 million, marking it as the third-largest lottery prize of the year so far. This comes after Wednesday night’s drawing failed to produce a ticket that matched all six winning numbers. However, the eventual jackpot winner will see a significantly reduced sum after taxes and other deductions are applied.
The numbers drawn in the latest Powerball draw were 1, 14, 20, 46, 51, with the Red Powerball number being 26.
Should someone win in the upcoming draw, they will have the option to receive the full $820 million spread across 30 annual payments or opt for a one-time cash payout of $383.5 million, a choice favored by most who hit the jackpot.
Choosing the cash option means the initial amount will be subject to a mandatory federal tax withholding of 24%, bringing the total down to approximately $291.5 million.
Further taxing at a federal marginal rate that could peak at 37%, depending on the winner’s overall taxable income, would reduce the amount even further to around $241.6 million.
State taxes could also impact the final take-home amount, varying by where the winner resides. States like New York impose a tax rate of 10.9% on lottery winnings, while states such as Texas, Florida, and California do not tax lottery earnings at all.
Depending on their state of residence, the winner could face additional taxes, as some states, such as New York, tax lottery winnings at 10.9%, while others, such as Texas, Florida, and California, don’t.
What To Watch For
The next Powerball jackpot draw is set to take place on Saturday night.
