Powerball numbers were drawn last night, and a single ticket holder, who purchased the winning ticket in California, will walk away with the nearly $700 million jackpot… well, before taxes, that is.
The winner matched all six numbers in Monday’s night’s drawing. There were five players who matched all five numbers without the Powerball. Those five individuals, two from Maryland, and one from Arizona, Florida and Virginia won $1 million. And there was one other lucky winner: A purchaser from Tennessee who matched all five numbers without the Powerball, but had the Power Play.
The jackpot was the 5th-largest-all-time for the game, and took number 7 on the list of all-time lottery jackpots across all games in the United States.
Of course, the advertised amount is more than what winners end up with. So what will the winner’s tax bill look like?
For the $699.6 million Powerball winner, the cash option — which most select — is $496 million. Before that reaches the winner, a 24% federal tax withholding of about $119 million will get shaved off the top. That leaves a hefty $377 million, although the IRS will likely be owned more in April due to the top marginal income tax rate of 37%.
However, being that yesterday’s winning ticket was purchased in California, there is good news on the tax front: California generally doesn’t tax lottery winnings. That compares to, say, winning in New York City, where a state income tax rate of 10.9% would apply, as well as a local tax of 3.876%.
Despite the taxes, those are some pretty big winnings!
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