The jackpot on the billboard is not what you'd take home.

The lottery withholds 24% of any prize over $5,000 for the IRS immediately, but a jackpot puts you in the top 37% federal bracket, so you owe the difference when you file. On top of that, most states take 0% to 10.9% — New York's 10.9% is the highest among ticket-selling states (NYC residents pay ~14.8% combined, and Hawaii taxes residents' out-of-state wins at 11%), while eight ticket-selling states (California, Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming) take nothing.

The 24% is only a withholding rate — a down payment, not the bill. Jackpot-size income lands almost entirely in the 37% bracket, so roughly another 13% of the prize is due with your tax return the following April. On a $430M lump sum, that's over $55M many winners don't realize they still owe.

The annuity always totals more dollars: on a $1B jackpot you'd collect about $631.5M after tax over 30 years versus about $270.9M at once (in a no-tax state). The lump sum is the advertised jackpot's cash value — currently around 43% — because the annuity figure includes 29 years of future investment growth. Which is better depends on returns, discipline, and taxes; this page shows the math, not advice.

Both Powerball and Mega Millions pay one immediate payment followed by 29 annual payments, each 5% larger than the one before. On a $1B jackpot the first payment is about $15.1M before tax and the final payment about $61.9M before tax. Each payment is taxed as ordinary income in the year you receive it.

Eight states that sell Powerball and Mega Millions take no state tax on winnings: California (lottery prizes are exempt by statute despite its 13.3% top income-tax rate), Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Alaska and Nevada have no income tax either but don't sell the games. Alabama, Hawaii, and Utah don't sell tickets and DO tax residents' out-of-state winnings.

NYC residents pay the country's biggest combined bite: New York State's 10.9% plus the city's 3.876% — about 14.8% on top of federal tax. A $1B jackpot's lump sum nets roughly $207.4M for an NYC winner versus $270.9M in a no-tax state — a difference of about $63.5M. Yonkers adds its own ~1.83% surcharge.

In April 2025 the ticket price rose from $2 to $5 with a built-in multiplier (2X–10X) on every play, the old $1 Megaplier was retired, starting jackpots rose to $50M, and jackpot odds improved slightly to 1 in 290,472,336. The multiplier applies to non-jackpot prizes only — it never changes the jackpot, so the after-tax math here is unaffected.

No — it moves with interest rates. The advertised jackpot is what the annuity's 30 payments add up to; the cash value is what the lottery would invest today to fund them. In August 2026, live drawings showed ratios of 42.5%–43.4%, so this calculator defaults to 43%. When a drawing publishes its exact cash value, enter it — you can adjust the percentage in the calculator.