8 states with the most prize money

The Powerball lottery jackpot has reached $1 billion for the second time in history. How much you actually take home if you win depends on the state you live in and whether lottery jackpots are subject to income tax.

The next draw will take place Monday night at 10:59 EST, and if anyone wins, it will be the fifth-largest payout in US lottery history, according to the Multi-State Lottery Association, which runs Powerball. To win, you must match all six of his numbers in the draw.

According to Powerball’s calculations, winners can choose to either receive the full jackpot as an annuity over 30 years, or receive a lump sum of approximately 51% less than the total jackpot.

While it may seem counterintuitive to have less total capital, many winners choose to do so after consulting their financial advisors. Because you can quickly reinvest your money and grow with compound interest.

Either way, the winnings you take home will depend on the total taxes incurred in your state.

All winners must pay federal taxes. He’s the only eight states that don’t charge state taxes on lottery winnings.

1. California
2. florida
3. new hampshire
4. south dakota
5. Tennessee
6. texas
7. Washington
8. wyoming

Unlike other states that impose taxes on winnings ranging from 2.9% to 8.82%, winners in these states get to take home the most money.

With respect to federal taxes, a 24% withholding tax is prepaid on winnings. But with such a big jackpot, you’ll have to pay a total of 37% federal tax on your 2022 tax returns, which is the highest rate for high-income earners.

According to Powerball, if you choose the highest annuity over the long term, you could make $630 million in states that don’t charge income tax on lottery winnings. Get $307,503,000 if you choose the one-time payment.