Additional Coverage:
- Mega Millions Jackpot Reaches $944 Million For Christmas Eve Drawing—Here’s How Much The Winner Could Take Home After Taxes (newsbreak.com)
Mega Millions Jackpot Soars to $944 Million
The Mega Millions lottery jackpot has reached an estimated $944 million, making it the seventh-largest prize in the lottery’s history. However, a lucky winner facing odds of one in 302 million would receive less than a third of the jackpot after taxes.
Payout Options and Taxes
A winning ticket holder can choose between a payout over 30 annual installments or a one-time lump sum of $429.4 million. The lump sum would be reduced to $326.3 million after a mandatory 24% federal tax withholding.
Depending on the winner’s income and deductions, a federal marginal rate of up to 37% could further reduce the prize to $270.5 million. Annual installments would pay an average of $19.8 million with a 37% federal tax rate.
State Taxes
Some states also tax lottery winnings, with rates ranging from 2.5% to 10.9%. This means that the winner’s after-tax payout could vary significantly depending on their state of residence.
Upcoming Drawings
The next Mega Millions drawing is on Tuesday night, while Powerball will hold its next drawing on Saturday night for an $88 million jackpot. Both jackpots offer lump sum options that would be subject to similar tax withholdings.
History and Odds
This jackpot is the seventh-largest in Mega Millions history. The lottery recently implemented rule changes to improve odds and increase jackpots. Despite the changes, the odds of winning the jackpot remain very low.