Topline
A single ticket sold in Washington state was declared the winner of the $754 million Powerball jackpot on Monday, the ninth-largest lottery jackpot in U.S. history, although the actual amount they take home will be far smaller after paying out a hefty tax bill.
File Photo: Steve Morton shows his scan card for his personal selection numbers for a ticket for a … [+]
Key Facts
The winning ticket holder will have the option to either receive the total jackpot amount of $754.6 million spread across thirty annual payments over the next 29 years—or pick the more popular option of a smaller lump sum payment of $407.2 million.
If the winner chooses the lump sum amount, they will first face a mandatory federal tax withholding of 24%, leaving them with $309.4 million.
The winner also faces a federal marginal income tax rate of up to 37%—which means they will need to set aside another $52.9 million unless they claim tax deductions through things like charitable contributions—cutting the prize to nearly $256.5 million before state taxes.
The state of Washington does not tax lottery winnings and also doesn’t levy any state income tax.
Surprising Facts
The winner managed to overcome extremely poor odds of one-in-292.2 million to win the jackpot on Monday. Such incredibly slim odds are a deliberate outcome of key changes to the games’ formulas and they have allowed jackpot prizes to swell to record levels in recent years.
Big Number
$2.04 Billion. That was the size of the largest lottery prize in U.S. history claimed by a Powerball ticket holder from the state of California in November last year.
Further Reading
Powerball Swells To $700 Million—Here’s Why There Have Been So Many Massive Jackpots Recently (Forbes)
Source: https://www.forbes.com/sites/siladityaray/2023/02/07/washington-resident-wins-754-million-powerball-jackpot-heres-how-much-they-will-take-home-after-taxes/