$2.04 Billion Powerball Winner: How Much Take Home After Tax Kiplinger Kiplinger is supported by its audience. When you purchase through links on our site, we may earn an affiliate commission. Here's why you can trust us.

$2 04 Billion Powerball Lottery Jackpot Winner Will Have a Massive Tax Bill

The $2.04 billion-dollar Powerball jackpot has its big winner and the federal government will get a big chunk of the prize from taxes. (opens in new tab) (opens in new tab) (opens in new tab) Newsletter sign up Newsletter (Image credit: Getty Images) By Kelley R. Taylor last updated 11 November 2022 In a wild turn of events, the $2.04 billion Powerball jackpot has a winner. On Tuesday afternoon, Powerball announced that a single winning Powerball lottery jackpot ticket was sold in Altadena, California. That means that someone out there matched all six numbers from the November 7 Powerball drawing. The lucky ticket holder has won the largest jackpot in Powerball history and the largest jackpot in U.S. lottery history. But of course, due to taxes, the winner will also take home a lot less money than advertised. The previous Powerball jackpot record was $1.586 billion, which was won by three ticket holders in 2016. The largest Mega Millions lottery jackpot to date, of $1.537 billion, was won by a sole winner in 2018. The odds of winning the November 7 Powerball jackpot were about one in 292.2 million. Since August, there had been 40 drawings in a row with no grand prize winner. But, lottery officials also point out that the Powerball has been hit seven times so far this year.

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Profit and prosper with the best of Kiplinger's expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail. Profit and prosper with the best of Kiplinger's expert advice - straight to your e-mail. Sign up So, that always has a lot of people thinking about how much money a lucky multi-billion-dollar jackpot winner will take home-after taxes.

Did Anyone Win the November 7 Powerball $2 04 Billion Jackpot

Powerball California Winner: Yes, Powerball lottery officials announced that a winning ticket was sold in California from the Monday, November 7 Powerball drawing. The winning Powerball numbers from that November 7 drawing were 10, 33, 41, 47, 56 and the Powerball was 10. Also, one ticket sold in Florida won $2 million, and there were twenty-two $1 million winning tickets sold in various states, according to Powerball officials.

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What is the Powerball Payout

The advertised cash value of the Powerball lottery for the record-high November 7 drawing was $997.6 million.

Powerball Lump Sum Payout or Annuity

Whoever wins the Powerball lottery jackpot, or another lottery prize, can choose to receive the payout in one of two ways. They can receive the payout as an annuity, which would be paid in thirty graduated payments over twenty-nine years, or they can receive the Powerball money in a lump sum payment. Most lottery winners choose the lump sum payout. In either case, while $2.04 billion is a bunch of money and $997.6 million is a lot of cash for the lump sum, the lucky Powerball lottery winner will also be looking at hefty tax bills.

Seven Things You Should Know About Winning a Lottery Jackpot One of those tax bills will be from the federal government and depending on where a Powerball winner lives-another could come from the state. The exact amount of tax that the winner will have to pay will depend on factors including the payout option that the winner chooses and the applicable state tax rate. That's because some states don't tax lottery winnings. Other states that do, have tax rates for lottery winnings that generally range from about 3% to almost 11%). For example, California is a state that doesn't tax lottery winnings, so the lucky ticket holder from Monday's $2.04 billion jackpot would only be looking at a hefty federal tax bill. But in any case, (once applicable taxes are taken out) the amount of money that the Powerball jackpot winner will walk away with will be a lot less than the world record $2.04 billion that's splashed across lottery news headlines.

How Much Do You Pay in Taxes on Powerball

If you're the lucky winner of Monday's massive Powerball jackpot (or if you won other lottery cash prizes from a Powerball or Mega Millions drawing), you will want to take a couple of deep breaths and secure and protect your winning ticket. Then, you will likely want to work with a qualified financial advisor to consider and plan for the various tax implications of winning the lottery.

8 Tax Tips for Gambling Winnings and Losses That's because when anyone wins the lottery, the IRS withholds 24% of the winnings off the top. With this Powerball jackpot, if the winner opted for the lump sum cash value of $997.6 million, they would be subject to federal income tax at the top tax rate, which is 37%. The lottery winnings for the $2.04 billion prize would be reported on the Powerball jackpot winner's 2022 federal income tax return. For 2022, the top (i.e., 37%) federal income tax bracket applies to single filers who have more than $539,900 in income and joint filers with income over $647,850. Due to inflation, the federal income tax brackets for 2023 have been adjusted upward. On the state side of things, most states treat lottery winnings as income for tax purposes and the tax rates vary by state. But the billion-dollar jackpot winner's state taxes could still amount to a huge sum given the world record size of the Powerball lottery jackpot.

Can the California Powerball Winner Remain Anonymous

The $2.04 billion Powerball winner won't be able to stay anonymous. That's because the winning Powerball ticket was sold in Altadena, California. California is a state that requires publicly disclosure of certain key lottery winner information (that includes the winner's name). But Powerball winners from other states may be able to stay anonymous. So, check the lottery rules in your state to be sure about whether you can remain anonymous if you win Powerball.

Powerball Drawing Days

Powerball drawing days are every Monday, Wednesday, and Saturday at 10:59 p.m. ET. Tickets are $2 per play. Powerball tickets are sold in 45 states, and the District of Columbia, Puerto Rico and the U.S. Virgin Islands. The five states that don't participate in Powerball are Alabama, Alaska, Hawaii, Nevada, and Utah.

Mega Millions Lottery Winner Will Get a Mega Tax Bill Explore More Tax Tips Kelley R. TaylorTax Editor, Kiplinger.comWith more than 20 years experience as an in-house legal counsel and business journalist, Kelley R. Taylor has contributed to numerous national print and digital magazines on key issues spanning education, law, health, finance, and tax. Kelley particularly enjoys translating complex information in ways that help empower people in their daily lives and work. Latest 4 Ways You Can Take Advantage of a Down Market With markets down for the year, it may seem that all the news is bad. But now could be a good time to make some profitable moves. By Adam Grealish • Published 11 November 22 New, Used or Leased: Is Now the Time to Buy an Electric Vehicle? The Inflation Reduction Act created new tax breaks for electric vehicles. Here's a guide to which EVs count and the best time to buy. By Rivan V. Stinson • Published 11 November 22 You might also like New "Stimulus" Check 2022: Massachusetts Tax Refund Money is Being Sent Now Massachusetts will return nearly $3 billion to eligible taxpayers beginning in November. By Kelley R. Taylor • Last updated 9 November 22 What's the Standard Deduction for 2022 vs. 2023? Tax Breaks Most Americans claim the standard deduction on their federal tax return instead of itemized deductions. How much can you claim on your 2022 and 2023 returns? By Rocky Mengle • Last updated 9 November 22 What Are the Capital Gains Tax Rates for 2022 vs. 2023? capital gains tax The capital gains tax rate that applies to a capital gain depends on the type of asset, your taxable income, and how long you held the property sold. By Rocky Mengle • Published 3 November 22 Virginia 2022 "Stimulus" Tax Rebates Many eligible Virginians have received an up to $500 tax rebate check for 2022. By Kelley R. Taylor • Last updated 2 November 22 What Are the Income Tax Brackets for 2022 vs. 2023? tax brackets Depending on your taxable income, you can end up in one of seven different federal income tax brackets – each with its own marginal tax rate. By Rocky Mengle • Last updated 9 November 22 California Stimulus Checks: More Debit Cards Going Out This Week If your last name begins with F to M, a California stimulus payment debit card could be in your mailbox soon. By Rocky Mengle • Last updated 7 November 22 529 Plan Contribution Deadlines Coming Soon in Many States Year-end state deadlines for making 529 college savings plan contributions that can maximize state tax breaks, are coming soon. By Kelley R. Taylor • Last updated 28 October 22 Capital Gains Tax: Year-End Review capital gains tax Now's the time to revisit the capital gains tax rules you need to know for year-end planning. By Orla O'Connor • Last updated 11 November 22 View More ▸ kiplinger About Us (opens in new tab) Terms and Conditions (opens in new tab) Privacy Policy (opens in new tab) Cookie Policy (opens in new tab) Kiplinger is part of Future plc, an international media group and leading digital publisher. Visit our corporate site.
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