Powerball Jackpot Hits $1 Billion—Here’s How Much A Winner Would Actually Take Home After Taxes

Powerball winners can claim their $1 billion prize in two ways, by either taking the whole jackpot in 30 annual payments over 29 years or by claiming a smaller lump sum of cash upfront, which most lottery winners opt for.

The lump sum is estimated to be $497.3 million, according to Powerball, which would be subject to an initial 24% federal tax withholding of roughly $119.3 million, leaving the winner with about $377.7 million.

The winner would also owe additional taxes at higher brackets: Up to the 37% top federal marginal tax bracket for ordinary income, so for a single taxpayer with no additional income, no dependents and no itemized deductions (like large charitable contributions), they would owe another $64.6 million in additional taxes, leaving $313.3 million before state taxes.

If the winner opts to take the full $1 billion in winnings over 30 years, they will receive annual payouts of $33.3 million on average before taxes.

While the 24% federal tax withholding still applies, it amounts to about $8 million annually, and the additional federal tax (for a single taxpayer with no other income, at today’s rates, which are likely to change) would come to another $4.3 million, leaving the winner with about $21 million per year before state taxes.