How much you’ll actually win from the Powerball or Mega Millions lottery in Washington
The Powerball lottery’s current jackpot is up to $1.6 Billion, with its next drawing on Saturday, Nov. 5, and the Mega Millions lottery has an estimated jackpot of $119 million that will be drawn Friday night, Nov. 4, but if your ticket has the winning numbers, you may not be cashing in as much as you thought.
After winning the lottery, certain lottery rules and taxes will change the winning amount you’ll actually be able to take home.
So how much can a Powerball or Mega Millions winner in Washington state actually win? It first comes down to whether you take the lottery as a lump sum, or in annual payments.
Lottery lump sum payout option
If you choose the lump sum cash payout option, you will receive a payment that is equal to the cash in the jackpot prize pool that is advertised with the jackpot total.
Cash payout lump sums are typically equal to 60% of the total jackpot amount, according to an article by State Farm.
For the Powerball jackpot, the cash option payout is $782.4 million, according to Washington’s Lottery.
For this $119 million Mega Million jackpot, the cash option payout is $57.7 million, according to the Mega Millions website.
All lottery winnings over $5,000 are first subject to a tax withholding of 24% from the lottery agencies, so with a $57.7 million payout, about $13.8 million will be withheld, coming out to a $43.9 million payout.
If you take the lump sum payout, you will also be placed in the highest tax bracket for the year, likely owing 37% in taxes to the IRS, according to TurboTax. If you take 37% of the remaining $43.9 million, you’ll have about $23.6 million remaining to take home.
For the Powerball winning, the remaining take-home amount would be about $374.6 million.
In Washington, there are no state taxes for lottery winnings.
However, according to Washington’s Lottery’s website, the lottery company is “required to check for debts owed to the State of Washington on prizes over $600. Debts owed to the state, such as child support payments, will be subtracted from the prize amount prior to prize payment.”
Lottery annual payout option
If you prefer to receive annual payments instead of a lump sum, the Powerball and Mega Millions will pay one immediate payment, followed by 29 annual payments that increase over time, according to Washington’s lottery. Each payment increases by 5% compared to the previous payment.
Choosing the annuity payment option will actually give you more money over the years, as the base amount will accrue interest throughout the 29 years of payments, according to TurboTax.
For a jackpot of $100 million, Mega Millions would immediately pay you about $1.5 million, and the future annual payments would grow to about $6.2 million, according to Mega Millions.
Your yearly earnings may vary depending on your tax filing status and investment choices.
The next Powerball drawing will take place at 7:59 p.m. on Saturday, Nov. 5. The next Mega Millions lottery drawing will take place at 8 p.m. on Nov. 4.
This story was originally published November 4, 2022 at 12:43 PM with the headline "How much you’ll actually win from the Powerball or Mega Millions lottery in Washington."
