The Powerball jackpot soared to an estimated $1.8 billion on Friday. Here’s what the winner can expect to pay in taxes.
The Powerball jackpot has soared to an estimated $1.8 billion ahead of Saturday night’s drawing.
It’s the second-largest prize in U.S. lottery history, only behind the record $2.04 billion winnings from November 2022, Powerball said on Friday. However, that windfall could shrink significantly after taxes.
There are two pretax options if you win: a lump sum, or one immediate payout followed by 29 yearly payments that increase by 5% annually. The lump sum is estimated at $826.4 million, while the annuity is worth an estimated $1.80 billion. Roughly $198.3 million goes straight to the IRS
The Powerball jackpot winner can expect a large upfront federal tax withholding. The IRS requires a mandatory 24% withholding for prizes that exceed $5,000.
