Powerball Teases $426 Million Prize—But Winner Could Take Home Only $121.9 Million After Uncle Sam, States Take Their Share

The Powerball jackpot has reached $426 million after Saturday’s drawing produced no winners, but federal and state tax obligations will significantly reduce the actual payout for any Monday night winner.

Drawing Details and Payout Options

No tickets matched Saturday’s winning numbers (6, 18, 34, 35, 36, and Powerball 2), pushing Monday’s jackpot to $426 million, according to Forbes. Winners can choose between 30 annual payments totaling $426 million or a lump sum of $193.5 million.

The lump sum option remains more popular among winners, offering immediate liquidity but at a substantial discount to the advertised prize.

Federal Tax Impact Slashes Winnings

Federal withholding taxes immediately reduce the jackpot by 24%, dropping the lump sum to approximately $147 million. However, lottery winnings face additional federal income tax based on the winner’s bracket.

For high earners in the 37% federal tax bracket, the effective tax rate significantly exceeds the initial 24% withholding. This pushes the after-tax lump sum down to $121.9 million—less than one-third of the advertised jackpot.

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State Tax Variations Create Geographic Advantage

State tax policies vary dramatically across jurisdictions. New York imposes the highest state lottery tax at 10.9%, while California, Florida, and Texas levy no state taxes on lottery winnings, according to Forbes.

Market Context and Odds

The odds of winning remain 1 in 292.2 million, according to lottery organizers. The $1 million second-tier prize carries 1 in 11.6 million odds.

The next drawing occurs Monday at 10:59 p.m. EDT. If no winner emerges, subsequent drawings will follow the Wednesday and Saturday schedules.

Recent lottery history shows significant volatility. A California winner claimed $526 million in March, benefiting from the state’s no-tax policy on lottery winnings. The largest recent jackpot reached $1.3 billion, won by a cancer patient from Laos who received $422 million after taxes.

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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Photo courtesy: HappyAngel 888 / Shutterstock.com