This is how much tax you would pay if you won the $1.8 billion Powerball jackpot
Powerball hits $1.8 billion. However, Uncle Sam will also be wetting his beak, taking a generous cut of the winnings, leaving far less than expected.
Thanks to some tweaks to the rules, Powerball jackpots have been reaching mind-blowing amounts. On Saturday evening, a $1.8 billion jackpot, $826.4 million in cash, is up for grabs.
The odds of winning the Powerball jackpot, to put it mildly, are a long shot—1 in 292.2 million. Still, that doesn’t stop millions from buying a ticket for the chance to win.
However, there’s a 100% chance you’ll owe a hefty share to Uncle Sam, no matter how you claim your prize. So how much will you actually keep?
Two ways to claim your Powerball winnings
Winners can choose between an annuity plan or a cash option.
If you go with the annuity, you’ll receive the full jackpot—but spread out over 30 years, with each payment increasing by about 5%. If you choose the cash option, you’ll get a lump sum, but it won’t be the full advertised amount.
Instead, it’s equal to the cash available in the Powerball prize pool.
How much goes to taxes?
Before you see a dime, the IRS takes 24% off the top for federal taxes on gambling winnings over $5,000. That brings the $1.8 billion jackpot down to $1.368 billion. This tax is a placeholder for additional levies that will be applied when you file your tax return, wherein you report your winnings.
But that’s not all. When tax season rolls around, you’ll likely be bumped into the highest income tax bracket. In 2024, income over $609,351 was taxed at 37%, meaning you’ll owe an additional 13% on top of the initial 24%, for your winning over that threshold.
You also need to consider state taxes as well
Where you live can also affect your final payout. Eight states don’t tax Powerball winnings: California, Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.
If you live in one of nine states with no income tax—including Alaska, Nevada, and the ones listed above—you’ll keep more of your winnings. But in other states, you could lose another 2.9% to 10.9% to state taxes.
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