Powerball Jackpot Soars To $725 Million: Tax Implications And State Variances

(CTN News) – The upcoming Powerball drawing on Sunday is set to offer an impressive estimated jackpot of $725 million, marking it as the third-largest Powerball prize of the year.

However, it’s important to note that the actual amount the winning ticket holder would receive after accounting for required taxes would be considerably less.

The fortunate winner will face a choice between two payout options. They can opt to receive the $725 million in 30 annual installments spread over 29 years, or they can choose a single, upfront lump-sum payment of $345.7 million.

In the case of selecting the lump-sum payment, there will be a mandatory 24% federal tax withholding, which would bring the total jackpot down to $262.7 million.

LIVE POWERBALL RESULT

Additionally, depending on the winner’s taxable income, they might be subject to a federal marginal tax rate as high as 37%, potentially reducing their winnings to as low as $217.7 million.

In certain states, lottery winnings may also be subject to state taxes, which vary in rates.

These state tax rates range from as low as 2.5% in Arizona (equivalent to $8.6 million in taxes for a $725 million jackpot win) to as high as 10.9% in New York (amounting to $37.6 million in taxes for the same jackpot win).

However, it’s worth noting that some states, such as California and Texas, do not impose state taxes on lottery jackpots.

The current jackpot stands as the eighth-largest in the history of the lottery, following a $731 million prize won in January 2021. Furthermore, if no winning ticket is drawn on Sunday, the jackpot could potentially increase even further.

Powerball Winning Numbers For September 20, 2023

 16, 27, 59, 62, 63, and Powerball 23.

Powerplay was 3x

How Many Balls Do You Need to Win a Powerball Prize?

The red Powerball is the only number you need to pick correctly to winning the Powerball prize.

A $2 purchase of the Powerball alone will award you a $4 prize, meaning that you have one in 26 chances of doubling your investment (there are 26 red balls to choose from).

You must match all five white balls in any order, as well as the red Powerball, to win the Powerball Jackpot.

Here are all the Powerball payouts:

Basic Powerball Payouts:

• 5 Correct White Balls and the Powerball winning numbers: Jackpot (starts at $40 million, has no upper limit)
• 5 Correct White Balls, but no Powerball: $1,000,000
• 4 Correct White Balls and the Powerball: $50,000
• 4 Correct White Balls, but no Powerball: $100
• 3 Correct White Balls and the Powerball: $100
• 3 Correct White Balls, but no Powerball: $7
• 2 Correct White Balls and the Powerball: $7
• 1 Correct White Ball and the Powerball: $4
• No White Balls, Just the Powerball: $4

Payouts for Powerball With PowerPlay:

• 5 Correct White Balls and the Powerball: Jackpot
• 5 Correct White Balls, but no Powerball: $2,000,000
• 4 Correct White Balls and the Powerball: $100,000–$500,000*
• 4 Correct White Balls, but no Powerball: $200–$1,000*
• 3 Correct White Balls and the Powerball: $200–$1,000*
• 3 Correct White Balls, but no Powerball: $14–$70*
• 2 Correct White Balls and the Powerball: $14–$70*
• 1 Correct White Ball and the Powerball: $8–$40*
• No White Balls, Just the Powerball: $8–$40*

*The exact payout will depend on whether a 2X, 3X, 4X, 5X, or 10X multiplier was drawn at random. The 10X multiplier is available only when the jackpot is worth less than $150 million.