After 40 successive draws, the supersized Powerball jackpot worth $632.6 million has been won by two ticketholders who matched all six numbers drawn Wednesday night.
The winners will split the seventh-largest pot in Powerball history, but they won’t receive the same amount due to differences in how their states tax lottery wins.
How the taxes break down
Each winner has a choice to receive an annuity worth $316.3 million spread out over 30 payments, or as an immediate lump sum of $225.1 million in cash. Whatever they choose, each state’s lottery automatically withholds 24% of that sum for federal taxes. In actuality, they will end up paying the top income tax rate of 37% come tax time.
The winner in Wisconsin will also pay more in taxes because, unlike California, it charges state taxes on lottery winnings — 7.65% on payouts over $5,001.
The difference is significant. Using the lump sum cash option, the split jackpot will result in an after-tax payout of approximately $142.4 million in California compared to $125.1 million in Wisconsin, a difference of just over $17.3 million dollars.
That’s nearly the same amount as the next Powerball jackpot prize, which has reset to $20 million for its drawing on Saturday night.
Don’t expect to win the jackpot
It’s also worth mentioning that your odds of winning the Powerball jackpot are extremely remote: you have a 1 in 292,201,338 chance of matching all six double-digit numbers needed.
There are other prizes if the numbers on your ticker match at least a few numbers drawn. You have a 1 in 36,525.17 chance of matching four numbers, for a total payout of $100.
Your best bet for winning money is to match the Powerball number, which is a 1 in 38.32 chance. However, the payout is only $4 — enough to buy two more lottery tickets.
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