TAMPA, Fla. (WFLA/NEXSTAR) — It’s obvious that $1.73 billion is so much money that most of us wouldn’t know what to do with it.
However, even if someone in Ohio wins the estimated $1.73 billion Powerball jackpot, that doesn’t mean they get to keep all that cash.
According to Powerball, whoever wins the jackpot during the next drawing, which is Wednesday night, will have the option to claim a lump sum payment of $756.6 million or 30 annual payments that increase by 5% each year over a 29-year-old period.
Before getting your winnings, you’d have to pay a 24% federal tax withholding, which the IRS requires for winnings over $5,000, CNBC explains. Out of the $756.6 million cash value, that would be about $181.58 million you’ll lose up front.
However, because you’d be bumped into the top tax bracket (for those with incomes over $578,125 for single filers), the IRS says your tax burden would be 37%. That’s another $98.32 million out of your cash prize, according to an analysis by USA Mega.
Of course, there are also state lottery taxes. There are several states that don’t tax lottery winnings, but Ohio isn’t one of them.
Ohio takes another 3.99%, or roughly $30 million off the lump sum payout.
An Ohio jackpot winner, after all taxes, would see about $310.1 million withheld from the lump sum payout, leaving the winner (if they’re a single-filer) with about $446.5 million, USA Mega reports. The annuity payments, after all 30 have been dispersed, would work out to about $1.02 billion – roughly $700 million less than the advertised jackpot. (You can see how taxes would impact the jackpot in every state here.)
Whether or not your state has a lottery tax, you may still be on the hook come tax time for your newfound income. Unless, of course, you live in a state without income tax: Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming (as well as Alaska and Nevada, but neither participates in Powerball).
The next drawing will be held Wednesday night at 10:59 p.m. ET.
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 Wednesdays, drawings are held every Monday and Saturday at 10:59 p.m. ET. 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.
