TAMPA, Fla. (WFLA) — An estimated $875 million Powerball jackpot is up for grabs Saturday – What would be the third-largest prize in the game’s history, according to the lottery.
But that’s not the amount one winner would be taking home.
If you were lucky enough to match the winning numbers in Saturday’s drawing, you’ll be met with two payment options: an estimated $441.9 million lump sum, or an annuitized prize worth all $875 million.
Before winners even see a penny of their jackpot, the federal government withholds a mandatory 24% that goes to the IRS. The tax applies to prizes greater than $5,000.
In the case of the winning Powerball ticket, that’s about $106.1 million for the cash option. But taxes don’t end there.
Winning millions will also send you into the highest federal income tax bracket. In 2023, that means single filers will pay $174,238 plus 37% of the excess over $578,125, and married couples filing jointly will pay $186,601 plus 37% of the excess over $693,750.
Essentially, Uncle Sam takes another 13%.
You may also be on the hook for state taxes. Depending on where you bought your ticket, some states, like Florida, have no lottery income tax while others have top-income state tax brackets exceeding 10%.
The odds of winning Saturday’s Powerball jackpot are 1 in 292,201,338.
The top 10 Powerball jackpots in history are as follows:
$2.04 Billion – Nov. 7, 2022 – CA
$1.586 Billion – Jan. 13, 2016 – CA, FL, TN
$768.4 Million – March 27, 2019 – WI
$758.7 Million – Aug. 23, 2017 – MA
$754.6 Million – Feb. 6, 2023 – WA
$731.1 Million – Jan. 20, 2021 – MD
$725 Million (est.) – July 12, 2023
$699.8 Million – Oct. 4, 2021 – CA
$687.8 Million – Oct. 27, 2018 – IA, NY
$632.6 Million – Jan. 5, 2022 – CA, WI