Why a Powerball jackpot winner won’t get $1.4 billion (2024)

After more than 30 consecutive drawings without a winner, the Powerball jackpot has swelled to an estimated $1.4 billion.

But if you’re lucky enough to win during Saturday’s drawing, you should know — you won’t exactly be an instant billionaire.

Win the Powerball jackpot? Think twice before taking the cash

At its current size, the jackpot ranks as the third-largest in Powerball history, coming in behind a$2.04 billionjackpot hit last November in California and a $1.586 billion jackpot split by three tickets (California, Florida, and Tennessee) in 2016.

It’s also the fifth-largest lottery prize in U.S. history (though it could grow again before Saturday’s drawing):

  1. $2.04 billion(Powerball): Nov. 7, 2022; California

  2. $1.602 billion(Mega Millions): Aug. 15, 2023; Florida

  3. $1.586 billion (Powerball): Jan. 13, 2016; California, Florida, Tennessee

  4. $1.537 billion (Mega Millions): Oct. 23, 2018; South Carolina

  5. $1.4 billion (Est. Powerball): Oct. 7, 2023

  6. $1.348 billion (Mega Millions): Jan. 13, 2023; Maine

  7. $1.337 billion (Mega Millions): July 29, 2022; Illinois

  8. $1.08 billion(Powerball): July 19, 2023; California

  9. $1.05 billion (Mega Millions): Jan. 22, 2021; Michigan

  10. $768.4 million (Powerball): March 27, 2019; Wisconsin

As fun as it is to fantasize about scoring a $1.4 billion paycheck, anyone lucky enough to beat the overwhelming odds to win the jackpot will be taking home far less than that.

There are a few reasons for this.

These are the best, worst states to win the lottery in

First, how the jackpot is paid out. Powerball jackpot winners can either take their winnings as a lump sum or an annuitized option of a one-time payment, followed by 29 annual payments that grow by 5% each year. The annuitized option is represented by the estimated jackpot size of $1.4 billion, while the lump sum is the cash value — $643.7 million for the current series.

The cash option (which you may want to think twice about taking) is what Powerball officials consider to be the amount of money needed to fund the annuity option. That means for this jackpot, Powerball officials estimate they’ll have $643.7 million in the prize pool at the time of the drawing and that that is enough to fund the annuity option.

If you win the jackpot and want your money right away, you’ll want to opt for the cash option, and if you want the largest payout in the end, you’ll want the annuity option. Opting for the annuity payout doesn’t guarantee you’ll be a billionaire, though.

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That is because of taxes.

While there are nine states that do not have a state lottery withholding on winnings, every state lottery has to withhold 24% in federal tax on prizes this large. After you tack on additional taxes, you’ll see roughly 37% of your prize money withheld.

At best, you’ll find yourself with a lump sum of roughly $405.6 million, or $883.1 million total in annuitized payments, according to an analysis by USA Mega.

But, depending on where you live, you’ll see even more withheld for state taxes. A winner with a single federal filing status in Arizona would have the best outcome, receiving either $389.5 million in a lump sum, or about $848.1 million after 30 annuitized payouts, USA Mega reports. A New York winner would lose the most to taxes, with a lump sum of $335.4 million or $730.5 million in annuitized payments.

Powerball: What’s the largest jackpot ever won in your state?

That is, of course, if they are the sole Powerball jackpot winner.

If there are multiple tickets that match the winning numbers, the jackpot will be split. Of the more than 200 Powerball jackpots that have been won since 2003, 18 have been split by two or more winning tickets.

The most recent was a $632.6 million jackpot split by two tickets, one each in California and Wisconsin in January 2022. Both winners selected cash options, equating to about $225.1 million (the cash value was $450.2 million when the jackpot was won) before taxes.

Experts do say, however, that there are certain numbers you can select when buying your Powerball ticket thatwill help you avoid sharing the prize(though your odds at the jackpot will remain the same, slim rate as everyone else’s).

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If you’re ready to try your luck, the next Powerball drawing is set for 8:59 MT Saturday night.

Powerball tickets are $2 each and sold in 45 states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands. In addition to Saturdays, drawings are held every Monday and Wednesday at 8:59 p.m. MT. You have a 1 in 292.2 million chance of winning the Powerball jackpot and a 1 in 24.9 chance of winning any Powerball prize.

For the latest news, weather, sports, and streaming video, head to FOX 4 Kansas City WDAF-TV | News, Weather, Sports.

Why a Powerball jackpot winner won’t get $1.4 billion (2024)

FAQs

Why a Powerball jackpot winner won’t get $1.4 billion? ›

After federal taxes, a $1.4 billion jackpot would give you roughly $29.44 million per year, according to usamega.com. Most states charge additional taxes on lottery winnings — eight states don't. In contrast, winners who choose the lump sum take home slightly less than half the listed jackpot amount.

What happened to the $2 billion Powerball winner? ›

After months of vetting through the California Lottery, Castro officially claimed his grand prize on Valentine's Day, Feb. 14, 2023. Since then, Castro has purchased three homes in his home state of California along with several vintage cars, including two Porsches almost a year after the drawing, news reports show.

Did anyone claim the billion dollar Powerball lottery? ›

The California Lottery revealed that a group won that prize. The largest lottery jackpot in U.S. history totals $2.04 billion and was won on a single Powerball ticket in California on Nov. 7, 2022. The winner of that prize was Edwin Castro.

What happens if you win a billion dollar lottery? ›

If the next draw produces a winning ticket, the winner will have their choice between a $1.04 billion payout over 30 years or a lump sum payment estimated at $478.2 million. A 24% federal tax withholding is taken right away, dropping the lump sum estimate to about $363.4 million.

Who won the 1.7 billion dollar Powerball? ›

$1.7B Powerball winner revealed

Theodorus Struyck represents the group of winners who purchased the winning $1.7 billion Powerball ticket at Midway Market in Frazier Park ahead of the historic draw held on October 11, 2023. The Golden State with the golden ticket.

How much money did Edwin Castro get after taxes? ›

After taxes, $2.04 billion Powerball lottery winner Edwin Castro walked away with $628.5 million, reports show.

How much is a $2 billion lottery after taxes? ›

Senior Contributor. I focus on taxes and litigation. The winning Powerball ticket was sold at Joe's Service Center in Altadena, California, entitling the ticket holder to a massive $2.04 billion jackpot.

How long does it take to get your money if you win the Powerball? ›

Your first annuity payment, or the single cash option payment, should arrive within six to eight weeks. There are generally no California state taxes for Lottery prizes, but we are required to withhold federal taxes.

What is the first thing you should do if you win the lottery? ›

Before you do so, there are things you should do:
  1. Safeguard the ticket. Sign the back of the ticket immediately and then store it somewhere secure. ...
  2. Be choosy about who you tell about your win. ...
  3. Engage a Lawyer and Financial Advisor. ...
  4. Decide on taking the lump-sum or annuity option. ...
  5. Plan on income taxes in two parts.
Jan 31, 2024

Can a lottery annuity be inherited? ›

I'm Taylor Kovar, a Certified Financial Planner (CFP), specializing in helping business owners with strategic financial planning. Yes, a lottery annuity can be inherited. If a lottery winner opts for annuity payments and passes away before all payments are made, the remaining payouts can be transferred to their heirs.

Who won the billion dollar Powerball 2024? ›

Powerball Lottery winner, Cheng 'Charlie' Saephan, celebrates his big win at the Oregon Lottery offices in Salem, Ore., on April 29, 2024.

How much did the 2.4 billion Powerball winner get? ›

(NEXSTAR) – After months of anticipation, a winner finally came forward to claim the record-breaking $2.04 billion Powerball jackpot won on a single ticket sold in California. Though the jackpot was advertised as a multi-billion dollar prize, the lucky winner walked away with just $997.6 million – why?

Has anyone claimed the two billion dollar Powerball ticket? ›

California resident Edwin Castro is the sole winner of the record-breaking jackpot from November 2022. The California Lottery is maintaining it verified the rightful winner of the record-breaking $2.04 billion Powerball jackpot, after a man claimed he had the winning ticket before it was stolen from him.

What is Edwin Castro doing now? ›

After months of vetting through the California Lottery, Castro officially claimed his grand prize on Valentine's Day, Feb. 14, 2023. Since then, Castro has purchased three homes in his home state of California along with several vintage cars, including two Porsches almost a year after the drawing, news reports show.

Did the Powerball winner come forward? ›

Officials said Theodorus Struyck came forward and represented the group. It was not immediately clear how many people made up the group of winners. The October jackpot was the second-largest U.S. lottery jackpot ever won. California was also the state where a $2.04 billion jackpot winning ticket was sold in 2022.

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