![]() How do you calculate taxes on Mega Millions? The federal government can withhold anywhere from 24 to 37 percent, depending on the total amount you win.Ģ. What is the federal tax rate on Mega Millions? Net Payout: The remaining prize awarded to a winner after federal and state taxes are applied. Gross Payout: The total prize awarded to a winner before federal and state taxes are applied. Please note that in some cases, you might have to pay additional taxes. This is computed as federal taxes + state taxes. Tax Liability: The taxes you will have to pay in order to receive your prize. This varies across states and can range from 0% to more than 8%. State Taxes: Additional tax withheld, dependent on the state. ![]() This can range from 24% to 37% of your winnings. This is also known as the cash option and is the more popular choice among jackpot winners.įederal Taxes: Income tax withheld by the US government, including income from lottery prize money. The total value is approximately 61% of the advertised jackpot. Lump-Sum or Cash Option: Payment scheme wherein a one-time payment is immediately awarded to the winner. The total value of all payments is equivalent to 100% of the advertised jackpot. These payments are graduated – meaning they increase by 5% each year to account for inflation. This number is based on the funds in the prize pool (including all prior rollovers), expected ticket sales for the next drawing, and current market interest rates.Īnnuity Payout or Annual Payment Option: Payment scheme wherein prizes are awarded starting with 1 immediate payment followed by 29 annual payments. Glossary of TermsĮstimated Jackpot: The total payment a winner would receive should they choose the annuity option for any given drawing. For example, large charitable donations can be written off, meaning reduced tax liabilities. What our Mega Millions tax calculator provides is a quick overview of the gross and net (after taxes) winnings you'd receive for both options – allowing you to make a more informed decision when comparing the two.įinally as an added feature, our tool also breaks down the annuity option into a handy payout schedule so you know how much annual payment you will receive per year. Since the cash option and annuity option award different payouts, it only follows that your tax liability (federal tax + state tax) will also be different for both. On the other hand, the annuity or annual payment option awards the winner with the full amount or 100% of the jackpot – starting with one initial payment, followed by annual payments over the next 29 years. Our Mega Millions Payout and Tax Calculator ExplainedĪs you might already know, when a player wins the Mega Millions jackpot, they'll have to choose between a single lump sum or 30 annual payments to claim their prize.Ĭhoosing the lump sum, also known as the cash option, reduces the jackpot size to approximately 61% of the original amount, but awards it all at once to the player. Lump Sum/Cash Option Calculator Gross Payout (~61% of the jackpot) ![]() They're all US state licensed and you can be signed up in less than 5 minutes! Why not check out our recommended sports betting sites and online casinos for something a little different. Just input the estimated jackpot amount, select your state, and our Mega Millions payout calculator will do all the rest.Īfter you are done, check out our guide on the best lottery prediction software for tools that will help increase your odds of winning - significantly. You'll also find a payout table for the annual payment option below for a more detailed breakdown. But, how much? Our Mega Millions calculator takes into account the federal and state tax rates and calculates payouts for both lump-sum cash and annual payment options, so you can compare the two. Assuming you beat the odds and match the draw perfectly, federal and state laws require that a sizable portion of your prize money goes towards taxes. Winning the Mega Millions jackpot is no easy feat, and even if you do it doesn't mean you'll be taking home the entire prize amount. Play the lottery online with official tickets! Save up to 20% on lottery tickets with the TheLotter VIP club.
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