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:
CaliforniaFloridaNew HampshireSouth DakotaTennesseeTexasWashingtonWyoming
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.
Most other states levy between 4% and 6% on lottery winnings, and as high as 10.9% in New York. That means New York winners would take home about $48.5 million less on the cash option — or $105 million less on the annuity — than players in states with no lottery tax.
Ticket prices and prize amounts have increased
Friday’s jackpot is the largest since the game underwent a major revamp in April.
The lottery raised ticket prices from $2 to $5 and slightly increased its payouts for the smaller non-jackpot prizes. Every ticket now automatically includes a random multiplier of 2X, 3X, 4X, 5X or 10X for those prizes.
The changes also improved players’ odds. By reducing the gold Mega Ball pool from 25 to 24, the odds of winning any prize improved slightly, from 1 in 24 to 1 in 23. Still, actually hitting the jackpot remains a long shot, with odds of 1 in 290,472,336.
The next drawing is Friday at 11 p.m. ET.
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