And eight states don't charge income tax on lottery winnings: California, Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. Then you have state income taxes, which range from 2.9% to 10.9% depending on which state you live in.
However, winners will almost certainly pay another 13% in federal taxes when they file their tax return, as the millions of dollars in winnings will put them in the top tax bracket of 37%. There are two payout options: The full jackpot amount spread out over 30 years as an annual payment, or just over half that amount as an upfront lump sum payment.Īll winners pay an automatic 24% federal withholding tax on their winnings, which is considered income.
Powerball's next draw is Wednesday night at 10:59 p.m.
