$1.7 billion Powerball jackpot: How much would a winner take home after taxes?

WASHINGTON — The Powerball jackpot is inching closer to record territory with an estimated $1.7 billion grand prize up for grabs in Saturday night’s drawing. But if you somehow beat the lottery’s astronomical odds, you’ll have a hefty tax bill waiting for you. 

That’s because lottery winnings are treated as income by the federal government and most states, so the jackpots are subject to state and federal income taxes. 

However, there are a handful of states that do not collect additional taxes on residents’ lottery winnings.

When a lottery winner comes forward, they must first decide whether they want to receive their winnings in a 30-year annuity, or receive their grand prize in a lump sum of cash. If they pick the annuity, they will eventually receive the entire advertised jackpot over the span of three decades. 

Most jackpot winners go with the lump sum, which means they get the “cash value” of that jackpot. For Saturday’s Powerball jackpot, the cash value was announced as about $770.3 million.

Right away, 24% of that cash value is withheld for federal taxes and goes to the IRS, TurboTax explains. 

So in the scenario where just one person wins the Powerball and selects that cash option, around $184.87 million of Saturday’s estimated prize would be withheld, dropping it to $585.428 million. 

But even then, you’re not off the hook quite yet for taxes. 

Because the federal government counts lottery winnings as income, getting such a large jackpot would likely move the winner into a higher tax bracket, in which their income is taxed at 37%. So when the winner next files their taxes, they’ll likely have to give the IRS another 13% of that prize.

In most states, the tax is taken from the prize money before it’s ever given to the winner. Details on when and how much the winner pays differ by state. 

There are only eight states and Puerto Rico, where Powerball is played, that don’t take more state taxes for a person’s lottery winnings, according to the Tax Foundation and USA Mega, an online multi-state lottery resource unaffiliated with the lotteries themselves. Those states are California, Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming.

According to estimates from USA Mega, the winner of a publicized $1.7 billion jackpot would earn $485,331,980 if they’re from one of the states that doesn’t tax winnings and take the lump sum option. 

But for example, if you’re from New York which has the highest state tax withholding, the net payout would drop to $401,369,280, according to USA Mega estimates. 

The following list shows the Powerball lump-sum cash amount after taxes for all 50 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands, according to an analysis from usamega.com.

Does not offer Powerball 

Does not offer Powerball 

$466,074,480 cash payout 

$455,290,280 cash payout

$485,331,980 cash payout

$451,438,780 cash payout

$431,488,010 cash payout

$434,492,180 cash payout

$485,331,980 cash payout

$445,353,410 cash payout

Does not offer Powerball

$441,463,395 cash payout

$447,202,130 cash payout

$462,222,980 cash payout

$456,060,580 cash payout

$441,424,880 cash payout

$454,519,980 cash payout

$462,222,980 cash payout

$430,255,530 cash payout

$412,153,480 cash payout (in-state resident) 

$416,004,980 cash payout

$452,594,230 cash payout

$409,457,430 cash payout

$451,438,780 cash payout

$449,127,880 cash payout

$439,884,280 cash payout

$445,276,380 cash payout

Does not offer Powerball

$485,331,980 cash payout

$402,524,730 cash payout

$439,884,280 cash payout

$401,369,280 cash payout

$452,594,230 cash payout

$462,993,280 cash payout

$461,260,105 cash payout

$448,742,730 cash payout

$409,072,280 cash payout

$461,683,770 cash payout

$485,331,980 cash payout

$439,191,010 cash payout

$437,573,380 cash payout

$485,331,980 cash payout

$485,331,980 cash payout

$485,331,980 cash payout

$485,331,980 cash payout

Does not offer Powerball

$417,930,730 cash payout

$441,039,730 cash payout

$485,331,980 cash payout

$402,524,730 cash payout

$448,203,520 cash payout

$426,404,030 cash payout

$485,331,980 cash payout