Won the Powerball or Mega Millions? See your real take-home after federal & state tax — and whether the lump sum or the 30-year annuity leaves you with more. ✓ 2026 tax
Lump sum vs annuity • After tax
The advertised jackpot is the annuity total paid over 30 years. Most winners take the lump sum (cash value), usually about half the headline number. Either way, the IRS withholds 24% up front, but big wins land in the top 37% federal bracket, and your state may add up to ~11% (or 0% in Texas, Florida, Washington, Tennessee and other no-income-tax states).
A subtle point this calculator shows: the annuity is often taxed less overall, because spreading the income across 30 years keeps more of it out of the top bracket — but the lump sum lets you invest immediately. There's no single right answer; this is an estimate, not tax or financial advice.
An advertised jackpot is the annuity value — the total of thirty graduated annual payments — not a sum of money anyone receives at once. The cash option, typically 45–52% of the headline, is what the lottery actually holds. Tax then applies twice over: 24% is withheld immediately, but the top federal rate of 37% applies to virtually the whole prize, so a substantial balance is due at filing. Most states add their own tax, and a handful add none. The gap between the advertised number and the deposited number is therefore very large.
Cash option ≈ Advertised jackpot × 45–52%Federal withholding = 24% immediately; actual liability = 37% of nearly all of itNet = Cash option × (1 − 0.37 − state rate)Annuity option: 30 graduated payments, each taxed in its yearwhere:
Assumptions: State treatment varies widely; several states levy nothing on lottery winnings. The annuity option spreads income across 30 years, which can keep more of it below the top bracket and is often the better after-tax choice despite being less popular.
Follow an advertised jackpot through the cash option and both layers of tax.
Result$218,080,000 of an $800,000,000 jackpot — 27.3%
Just over a quarter of the advertised figure reaches the bank account. The 24% withholding is the trap most winners miss: it looks like the tax has been paid, but an additional 13 percentage points — nearly $49 million here — is still owed the following April.