The Powerball jackpot rose to $687 million after no tickets matched all six winning numbers drawn on Monday night, but the winner will take home a significantly smaller amount after paying their taxes.
If a winner is found in the next draw, they will get to choose between receiving the $687 million prize money split over 30 annual payments or a lump sum cash payment of $327.3 million—usually the preferred pick.
The cash payout drops to $248.7 million after a mandatory federal tax withholding of 24% is applied.
The winner may then face a 37% federal marginal rate—depending on their taxable income—dropping their winnings further to $206.2 million.
If the winner picks the installment option, their yearly payout of $22.9 million will fall to $14.4 million if the 37% federal marginal rate is applied.
The winner’s state of residence will also have an impact, as some states do not tax lottery winnings, while others like New York levy a 10.9% charge.
The next drawing for the Powerball lottery will take place on Wednesday night. But, before that, a bigger draw for the $875 million Mega Millions jackpot will take place Tuesday night—the biggest of the year so far.
A person who buys a ticket will need to overcome astronomically poor odds of 1-in-292.2 million to win the Powerball jackpot. This is only slightly better than Mega Millions, which has even more abysmal odds of 1-in-302.6 million.
