--- title: Here's What You'll Pay in Taxes When You Win the $1.6 Billion Mega Millions Jackpot description: What happens if you get all six Mega Millions winning numbers and hit the $1.6 billion jackpot? You could owe $330 million in federal taxes. authors: - name: Sergei Klebnikov url: https://money.com/author/sergei-klebnikov/ at_money_since: 2017 articles: 74 covers: - Taxes - Banking - Business - Career Advice - Credit - Credit Cards - Economy and Politics - Education - Housing - Identity Theft - Insurance - Investing - Lifestyle - Personal Finance - Retirement - Shopping - Technology former_staff: true published: '2018-10-23T15:00:47.000Z' modified: '2024-04-17T11:04:24.000Z' section: Taxes tags: - Lottery - Mega Millions - Powerball - Tax Cuts and Jobs Act - Taxes word_count: 441 canonical: https://money.com/mega-millions-jackpot-taxes/ type: Article source: structured-blocks --- > **Disclosure:** We may earn a fee if you click on the links below. Compensation does not determine ranking. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![Record Mega Millions lottery jackpot in Arlington, Virginia, USA - 22 Oct 2018](https://img.money.com/2018/10/181022-powerball-taxes-lottery.jpg) *A sign shows the current Mega Millions and Powerball lottery jackpots as a customer purchases Mega Millions lottery tickets at a retailer in Arlington, Virginia, October 22, 2018. No winning tickets were sold for 19 October's Mega Millions drawing, a 44-state lottery, and the jackpot now grows to 1.6 billion US dollars for the next drawing on October 23, 2018.* Whoever wins the record-breaking $1.6 billion Mega Millions jackpot is in for a huge payday. And so is the tax man. The Mega Millions drawing, which breaks the [previous 2016 record](http://www.megamillions.com/news-releases/mega-millions-jackpot-skyrockets-to-all-time-world-record-1-6-billion) as the highest lottery jackpot in U.S. history, will take place Tuesday. Mega Millions drawings always occur at 11 p.m. ET on Tuesdays and Fridays, and while the [deadline to buy Mega Millions tickets](https://money.com/mega-millions-highest-jackpot-deadline-buy-tickets-1-6-billion/) varies by state, you generally need to purchase tickets 15 minutes to an hour before the drawing. A smaller-but-nothing-to-sneeze-at drawing for the $620 million Powerball jackpot will follow on Wednesday. While advertised as a $1.6 billion jackpot, the next lottery player to have all six winning Mega Millions numbers will be awarded nearly $905 million if they choose to take the cash lump sum, [according to web site USA Mega](https://www.usamega.com/mega-millions-jackpot.asp). A Mega Millions winner who chooses the annuity will receive about $53 million annually for 30 years. What is the $905 million Mega Millions grand prize worth after taxes? Assuming the winner takes the lump sum, he or she could owe more than $330 million in 2018 to Uncle Sam, plus additional millions to a state government – depending on where they live. That's because the giant lump sum would instantly put the winner in the top federal marginal income tax bracket of 37% – it kicks in at $500,000 for singles and $600,000 for couples this year. [According to USA Mega](https://www.usamega.com/mega-millions-jackpot.asp), the IRS will withhold 24% of the winner's lump check when it is issued – $217 million if you win the latest Mega Millions jackpot. Then another $117 million will be due by the end of the year, assuming you don't lower your tax bill by giving some prize money away to charity. This week's $620 million Powerball jackpot comparably pays out a lump sum of $354 million, but would trigger $85 million in federal withholding right away, and another $46 million tax bill by the end of the year. In addition to federal taxes, lottery winners are subject to [varying state and local taxes](https://taxfoundation.org/state-lottery-tax-2018/). Among the lowest-taxing states, based on withholding rates, are North Dakota (2.9%), Pennsylvania (3.07%), and Indiana (3.23%). Other places like Maryland, Washington D.C., New Jersey, and Oregon withhold between 8% and 9%. New York withholds the most, at 8.82% – and also imposes additional withholding if you live in either New York City (3.876%) or Yonkers (1.323%). As with federal taxes, your final state tax liability could be different, depending on your individual circumstances. Meanwhile, some states have no income tax or don't tax lottery prizes; these include California, Florida, New Hampshire, Tennessee, Texas, South Dakota, Washington and Wyoming. ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/mega-millions-jackpot-taxes/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Taxes", "item": "https://money.com/taxes/" }, { "@type": "ListItem", "position": 3, "name": "Tax Relief", "item": "https://money.com/tax-relief/" }, { "@type": "ListItem", "position": 4, "name": "Here's What You'll Pay in Taxes When You Win the $1.6 Billion Mega Millions Jackpot" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/mega-millions-jackpot-taxes/#webpage", "url": "https://money.com/mega-millions-jackpot-taxes/", "name": "Here's What You'll Pay in Taxes When You Win the $1.6 Billion Mega Millions Jackpot", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2018-10-23T15:00:47.000Z", "mainEntity": { "@id": "https://money.com/mega-millions-jackpot-taxes/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/mega-millions-jackpot-taxes/#breadcrumb" }, "dateModified": "2024-04-17T11:04:24.000Z" }, { "@type": "Article", "headline": "Here's What You'll Pay in Taxes When You Win the $1.6 Billion Mega Millions Jackpot", "articleSection": "Taxes", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2018/10/181022-powerball-taxes-lottery.jpg", "width": 4612, "height": 2998, "caption": "181022-powerball-taxes-lottery" } ], "author": [ { "@type": "Person", "name": "Sergei Klebnikov", "url": "https://money.com/author/sergei-klebnikov/", "@id": "https://money.com/author/sergei-klebnikov/#author" } ], "publisher": "https://money.com/#organization", "datePublished": "2018-10-23T15:00:47.000Z", "description": "What happens if you get all six Mega Millions winning numbers and hit the $1.6 billion jackpot? 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