Mega Millions Jackpot Jumps To $820 Million—Here’s How Much The Winner Will Take Home After Taxes

Topline

The Mega Millions jackpot reached an estimated $820 million for its next drawing on Tuesday, following a $1 billion Powerball jackpot won earlier this week, though the winner would receive less than half that amount after paying required taxes.

The Mega Millions jackpot reached $820 million.

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Key Facts

The winner—facing odds of one in 302.6 million—has the option to receive the $820 million in 30 annual installments over 29 years, or as an up-front, $422 million lump sum.

The lump sum would be reduced to $320 million following a mandatory 24$ federal tax withholding, while a federal marginal tax rate as high as 37%—depending on the winner’s taxable income—could reduce the winnings to as low as $256.8 million.

Lottery winnings are also subject to taxes in several states, from as low as 2.5% in Arizona ($10.5 million) to 10.9% in New York ($45.9 million), though some states—including California, Florida and Texas—don’t tax lottery winnings.

Eight tickets for Friday’s drawing won $1 million prizes, while 14 won $20,000 and 53 won $10,000.

Big Number

20.7 million. That’s how many winning tickets have been sold since the jackpot was last won on April 8, when a $476 million prize was won, according to the lottery.

Tangent

A ticket sold in Los Angeles won an estimated $1.08 billion Powerball jackpot on Wednesday, the sixth-largest lottery reward in U.S. history. The winner has the option of receiving the jackpot across 30 annual payments, or as a lump sum payment of $558.1 million. A 24% mandatory federal tax withholding would reduce the winnings to $424.15 million, while a 37% federal marginal rate would drop the winnings to as low as $351.6 million.

Key Background

The odds of winning either the Powerball or Mega Millions jackpot worsened since both decided to increase the pool of white balls to choose from. The 13 largest jackpots from either lottery have occurred over the last 10 years, including four Mega Millions jackpots eclipsing $1 billion in the last five years. The jackpot eclipsed the $1 billion mark twice in the last year, including a $1.34 billion prize won in January and a $1.33 billion prize won last July.

Further Reading

Ticket Sold In LA Wins $1.08 Billion Powerball Jackpot—Here’s How Much The Winner Will Take Home After Taxes (Forbes)

Both Powerball And Mega Millions Jackpots Top $500 Million—Here’s Why There Are So Many Giant Jackpots (Forbes)

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