Of those that do, the state tax rate is typically between 3% and 8%. But since you'd be winning millions of dollars, you'd almost certainly have to pay the top federal income tax rate of 37%, which would be owed against your winnings when you file a 2022 tax return.Īnd most states tax lottery winnings as income. Whatever option you choose, you'll be obligated to pay taxes on your lottery winnings.Īll winners must pay automatic federal withholding taxes of 24%. This allows winners to grow their money through compound interest over a longer period of time.Įither way, Powerball suggests consulting a financial expert before you decide which option is best for you. The full jackpot amount paid out as an annuity over 30 years.ĭespite the much lower payout, many winners chose the lump sum option since it can be invested right away.That's just under half of the current jackpot of $800 million, according to Powerball's calculations. A smaller lump sum that only includes money on hand from the sale of tickets for the drawing.
The exact amount you win varies based on two payout options:
