The Mega Millions jackpot has soared to $1.15 billion, but where you live can make a huge difference in how much you keep.
Key Facts:
• Jackpot amount: $1.15 billion (fifth-largest in game history)
• Federal tax rate: 37%, though only 24% is withheld upfront
• State lottery taxes usually range from 3% to 6%, with New York at 10.9%
• Eight states do not tax lottery winnings: California, Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming
• Next drawing: Friday, December 27, 2024, at 11 p.m. ET
The Rest of The Story:
Choosing the lump sum versus a 30-year annuity greatly affects the payout for those lucky enough to win the lottery.
If you live in a state without a lottery tax, the cash option could total about $325 million, while the annuity pays roughly $725 million over three decades.
If you buy a winning ticket in another state, you may face that state’s taxes too, although many states allow a credit or deduction for taxes paid elsewhere.
The odds of winning are 1 in 302,575,350 but should you be one who wins consult a tax professional to weigh your options.
Mega Millions jackpot surges to $1.15 billion after there was no Christmas Eve winner. Andrew Dymburt has more on tonight's new drawing. pic.twitter.com/QEP6FT8D50
— Good Morning America (@GMA) December 27, 2024
The Bottom Line:
Picking the right place to purchase your ticket can save you millions if you’re lucky enough to win one of the big prizes.
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Whether you choose a lump sum or annuity, savvy tax planning is key to keeping as much as possible.