The Mega Millions grand prize has swelled to an astounding $977 million, with the potential to cross $1 billion in its next rollover – a mark only hit twice in lottery history. Despite long odds of winning at 1 in 302.5 million, players nationwide are hopeful as the drawing approaches on Tuesday.
Winners can choose between annuity payment over 29 years or a lump-sum of approximately $716 million before taxes. However, the final amount depends heavily on federal and state tax rates. With federal tax rates applicable to all winners, up to 37% after tax returns could potentially go to the government.
State taxes further impact the total prize. They vary significantly, from 3—10.9%. This means that winnings can be drastically reduced post-taxation.
Nearing the billion-dollar lottery prize
So, lottery enthusiasts should consider this when buying their tickets.
For instance, New Hampshire, South Dakota, and Washington are among eight states that don’t tax lottery winnings, thus providing larger prize amounts and promoting more lottery participation. Winners in these states can enjoy their prize without state tax reductions, whether they choose the lump sum or annuity payments.
The purchase location and winner’s state of residence heavily influence the final prize due to tax laws. It’s advised that winners seek help from a tax professional to navigate these complex tax implications, and make the most advantageous decisions.
The next draw is set for Friday, March 22 at 11 p.m. ET. Those desiring to participate can buy their $2 ticket until 10:45 p.m. ET on the draw day. The final jackpot would depend on the number of tickets sold. Good luck to all!
