With a really large jackpot, if the winner opted for the lump sum cash value, they would be subject to federal income tax at the top tax rate, which is 37%.

That's because when anyone wins the lottery, the IRS withholds 24% of the winnings off the top. Then, you will likely want to work with a qualified financial advisor to consider and plan for the various tax implications of winning the lottery.Ĩ Tax Tips for Gambling Winnings and Losses If you’re the lucky winner of a massive Powerball jackpot (or if you win other lottery cash prizes from a Powerball or Mega Millions drawing), you will want to take a couple of deep breaths and secure and protect your winning ticket. How Much Do You Pay in Taxes on Powerball? Other states that do have tax rates for lottery winnings that generally range from about 3% to almost 11%.īut in any case, once applicable taxes are taken out, the amount of money that any winner of the Powerball jackpot would walk away with will be a lot less than the multi-millions that are splashed across lottery news headlines. That’s because some states don’t tax lottery winnings. The exact amount of tax that a winner will have to pay will depend on factors including the payout option that the winner chooses and the applicable state tax rate. One of those tax bills will be from the federal government and, depending on where a Powerball winner lives, another could come from the state.

Seven Things You Should Know About Winning a Lottery Jackpot

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