With no winner on Tuesday, the Mega Millions jackpot has climbed to $965 million — the seventh largest in the lottery’s 29-year history.
But how much a winner would actually take home depends on their payout choice and where they live. State taxes can reduce the jackpot by as much as $105 million, with winners in eight states keeping the biggest share of the nearly $1 billion prize.
The states are:
These states don’t tax lottery winnings, meaning that residents there would receive the maximum payout — either a cash lump sum of $280.6 million or a 30-year annuity totaling $609.2 million, according to usamega.com. Even though the cash option offers much less money, it’s often chosen since it can be reinvested right away.
Federal taxes, however, are unavoidable: 24% is withheld upfront on all winnings, but your total tax bill will likely be higher when you file. A jackpot this large would push you into the top federal tax bracket of 37%, meaning that the majority of your winnings would be taxed at that rate.
