Mega Millions Jackpot Hits $1.25 Billion—Here’s How Much The Winner Will Take Home After Taxes

Topline

The Mega Millions jackpot surged to an estimated $1.25 billion—the sixth largest in U.S. history—after no tickets matched all six numbers drawn on Tuesday night, although the winner of the prize will receive a far smaller payout after their tax bill.

The Mega Millions lottery jackpot has ballooned to $1.25 billion after Tuesday’s drawing.

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Key Facts

If there is a winner in the next draw, they can choose between a $1.25 billion payout spread over 30 annual installments or a lump sum amount of $625.3 million—usually the more popular choice.

The lump sum payment will first face a mandatory federal tax withholding of 24%, leaving the winner with $475.22 million.

Depending on the winner’s taxable income, they could face a federal marginal rate as high as 37%, which would further drop their winnings to around $394 million.

If the winner picks the installments option, the annual payments of around $41.6 million could drop as low as $26.2 million, if the 37% federal marginal rate is applied.

The amount the winner takes home will also be determined by their state’s policies, as some states like New York tax lottery winnings at 10.9%, while others like Texas, Florida and California don’t tax them at all.

What To Watch For

The next drawing for the Mega Millions jackpot is scheduled for Friday at 11 p.m. ET. A person would have to overcome abysmal odds of 1-in-302.6 million to win the jackpot. In the past decade, Mega Millions has tweaked its formula to worsen a player’s odds of winning while driving up the jackpot amount.

Big Number

$1.537 billion. That is the size of the largest ever Mega Millions jackpot and it was claimed in 2018 by a single ticket holder in South Carolina. The largest jackpot in U.S. history was a $2.04 billion Powerball prize claimed by a ticket buyer from California last year.

Further Reading

Mega Millions Jackpot Hits $1.1 Billion—Here’s How Much The Winner Would Take Home After Taxes (Forbes)

Here Are The Top 10 Lottery Jackpots Of All Time (Forbes)

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