The prize will be the second-largest jackpot in Powerball history after no winning ticket has been sold since August.
No one bagged Wednesday night’s billion-dollar Powerball draw, sending the jackpot soaring to a nearly record-breaking $1.5 billion for the next draw, the lottery said, though any lucky winner will face a hefty tax bill and take home much less than the headline prize—here’s how much.
Powerball lottery winners can choose between receiving the full prize as an annuity—a series of 30 payments paid over 29 years—or as a single lump sum payment.
The single payment is less than the advertised jackpot (which emphasizes the value of the annuity prize) but is the most popular option among winners and Saturday’s cash prize is worth an estimated $746 million.
A mandatory federal tax withholding of 24% on gambling winnings would immediately reduce that amount by $179 million for a single prize winner, who would take home $567 million, though the taxman is far from finished.
The top federal marginal rate is 37%, meaning a single taxpayer with no other income, dependents or tax deductions like charitable giving would need to set aside an additional $97 million for taxes and can expect the overall prize to be whittled down to $470 million.
