All lottery winnings are considered taxable income by the Internal Revenue Service, so every winner must pay a tax of at least 24% upfront.
While the lump sum is much less than the annuity option, most winners pick the upfront payout since they can immediately invest and grow those funds.Īnd then there's the tax bill. For the Mega Millions $400 million jackpot, it's $205,000,000. For payouts, there are two options: You can get the full jackpot amount as an annuity paid out over 30 years, or you can receive roughly 52% of the jackpot as a lump sum that's paid out right away.įor the $522 million Powerball jackpot, the lump sum payout is $269,600,000.
