The single payment is less than the advertised jackpot, which emphasizes the value of the annuity prize, but is the most popular option among winners and Wednesday’s cash prize is worth an estimated $1.12 billion.
A mandatory federal tax
withholding of 24% on gambling winnings would immediately reduce that amount by $269 million for a single prize winner, who would take home $851 million, though the taxman is far from finished.
The top federal marginal rate is 37%, meaning a single taxpayer with no other income, dependents or tax deductions like charitable giving would need to set aside an additional $145 million for taxes and can expect the overall prize to be whittled down to $706 million.