It's also worth noting that there are five states that do not participate in the Powerball lottery at all: Alabama, Alaska, Hawaii, Nevada and Utah.Īssuming a top federal tax rate of 37%, here's the after-tax amount you'd take home in each state and Washington, D.C., if you won the $1 billion jackpot, for both the lump sum and annuity option, according to. Choose five white numbers from 1 to 69 and the red Powerball from 1 to 26. And eight states don't charge income tax on lottery winnings: California, Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. As mentioned, Powerball rules are super simple to follow. Then you have state income taxes, which range from 2.9% to 10.9% depending on which state you live in. However, winners will almost certainly pay another 13% in federal taxes when they file their tax return, as the millions of dollars in winnings will put them in the top tax bracket of 37%. There are two payout options: The full jackpot amount spread out over 30 years as an annual payment, or just over half that amount as an upfront lump sum payment.Īll winners pay an automatic 24% federal withholding tax on their winnings, which is considered income. Powerball's next draw is Wednesday night at 10:59 p.m.
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