Mega Millions Jackpot Reaches $563 Million—Here’s What The Winner Would Take Home After Taxes

Topline

The Mega Millions jackpot has swelled to $563 million, the eighth-largest reward in its history, after no winning tickets were drawn Friday night, though the winner—facing one-in-302-million odds—would take home less than half of that amount after paying required taxes.

The jackpot is the eighth-largest in Mega Millions history.

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Key Facts

A ticket holder who matches all five white balls and one “megaball” to claim the grand prize can choose between a payout over 30 annual installments or a one-time lump sum of $265.4 million.

The lump sum would be cut down to nearly $201.7 million following a mandatory 24% federal tax withholding, while a federal marginal rate as high as 37%—depending on the winner’s taxable income and other tax deductions—could reduce the winnings to $167.2 million.

A 37% federal marginal rate would reduce annual payments to about $11.8 million.

Some states tax lottery winnings with rates as low as 2.5% in Arizona ($6.6 million) to as high as 10.9% in New York ($28.9 million), though other states like California or Texas don’t tax winnings.

Big Number

14 million. That’s how many winning (non-jackpot) tickets have been sold since the Mega Millions jackpot was last won in December. Of these, 25 won $1 million or more.

What To Watch For

Mega Millions will hold its next drawing at 11 p.m. EST on Tuesday. Powerball will hold its next drawing Saturday night for a $376 million jackpot. That prize includes a $178.5 million lump sum option, which is reduced to $135.6 million with a 24% federal tax withholding or to $112.4 million with a federal marginal rate as high as 37%.

Key Background

Both the Mega Millions and Powerball lotteries changed their rules in 2017, which increased the pool of white balls to choose from. That decision caused larger jackpots to accumulate for longer periods as the odds of winning were decreased. The largest lottery prizes in U.S. history have been won over the last eight years, including five jackpots that surpassed $1 billion.

Tangent

A Washington D.C. man is suing the organizations that run the Powerball there, claiming winning numbers that appeared online that matched his ticket were “mistakenly posted.” The lawsuit claims breach of contract, gross negligence and emotional distress. The man, John Cheeks, has requested $340 million—the amount of the jackpot at the time, as well as additional compensation in damages.