Our Powerball Payout and tax calculator simplifies the process of calculating your federal, state, and other applicable taxes. Enter a few details, and you’ll instantly see your estimated winnings, whether you choose a lump sum or annuity payment. We use the latest tax rates to give you an accurate breakdown so there are no surprises. With our tool, you skip the guesswork and determine precisely how much of your jackpot stays in your pocket. Start calculating your after-tax Powerball payout now.
You can calculate your Powerball tax payout in two easy steps using the Lottery n Go Powerball calculator.
Here is a step-by-step guide to calculating US Powerball payout and taxes:
- Fill in your prize amount in the first field titled “How big is the jackpot?”
- Then, select the state you live in from the second field.
- Click on Calculate and wait for your results.
You can always enter another sum and let the tool calculate your prize scheme for it. The tool is free of charge.
Powerball Lump Sum and Annuity Calculator
Powerball Lump Sum Payout Calculations
In the United States, the tax rate is determined by the Internal Revenue Service (IRS), and it can change based on several factors, such as where you live, your marital status, and whether you’re the head of your household. In addition, the amount you end up with depends on taking lump or annuity payments and applicable taxes.
An Example of How Your Payout Works
It’s much simpler if you choose a lump sum payment. Let’s say that you won $1 million. Here is what happens:
- The lottery will usually reduce the sum to around 61%, which is around $610K.
- The next step is to apply taxes. The federal rate is 24%, although it might vary. That’s $146.4K.
- You also need to pay state tax. If you are in Arizona, the rate is 5%. That means you reduce $30.5K more from the sum.
- The ultimate result is $433.1K, and that’s how much you receive.
You get the entire sum over 30 years if you choose annuity payments.
- The total tax you pay on $1 million would be $240K (24%) for the federal tax and $50K (5%) for the state tax in Arizona.
- That makes the total net payout $710K. It’s worth noting that you’ll also pay taxes over the mentioned 30 years.
- So, you’ll get $10,500 the first year and then pay taxes on that sum. Each subsequent payment will increase by 5%, and in the last year, you received $41,160.
Powerball Annuity Calculator Yearly Plan (Example)
To better understand how the annuity payment plan functions, let’s illustrate with a table how your annuity plans will be structured based on winnings of $1 million and an initial payment of $10000.
| Year | Gross Payout | Federal Taxes(24%) | Arizona Taxes (5%) | Net Payout (yearly) |
|---|---|---|---|---|
| 1 | $10,000 | $2,400 | $500 | $7,100 |
| 2 | $10,500 | $2,520 | $525 | $7,455 |
| 3 | $11,025 | $2,646 | $551 | $7,828 |
| 4 | $11,576 | $2,778 | $579 | $8,219 |
| 5 | $12,155 | $2,917 | $608 | $8,630 |
Fast forward to the last five years
| Year | Gross Payout | Federal Taxes(24%) | Arizona Taxes (5%) | Net Payout (yearly) |
|---|---|---|---|---|
| 26 | $33,863 | $8,127 | $1,693 | $24,044 |
| 27 | $35,556 | $8,533 | $1,778 | $25,245 |
| 28 | $37,334 | $8,960 | $1,867 | $26,507 |
| 29 | $39,200 | $9,408 | $1,960 | $27,832 |
| 30 | $41,160 | $9,878 | $2,058 | $29,224 |
What Are the Applicable Taxes When You Win the Powerball?
If you read our lottery payout and tax guide, you’ll find three types of taxes that apply to your Powerball winnings. Here’s a quick breakdown of each.
Federal Taxes on Lottery Winnings
The initial rate for the federal tax is 24%. This applies to all residents, and you are obliged to report any taxable revenue. If you find yourself in a higher tax bracket, this tax can increase to 37%. As for non-residents, the tax is 30% and doesn’t change. That means you can play US Powerball as a foreigner, but this tax will be higher.
For instance, if you win $1 million and you opt for a lump sum, you will get around $610,000 and your federal tax will be a one-time payment of $146.4k. However, if you decide to go with the annuity payment, you will pay the standard 24% of the annuity every year.
State Taxes
First, it’s important to mention that some states don’t apply this tax to lottery winnings. If you are in California or Delaware, you won’t have to pay a dime. As for other states, this rate varies from 2.9% to 8.8%. It’s good to be a resident of North Dakota, which only taxes you 2.9% on lottery winnings.
Most states have a rate of around 5%, but if you play in New York, the state tax is 8.82%. For more information on the tax rate of your state of residence, check out our guide on taxes on lottery winning.
Local Taxes
Local taxes might also be applicable in your case. These are the fees required by the county or municipality where you reside or play. If you are a foreigner, the money you transfer to your country could also be subject to taxes. For example, New York City has a local income tax of up to 3.876%. Philadelphia, Ohio, and Pennsylvania also charge a city wage tax.
FAQs
What is the cash payout for Powerball?
The cash payout of the Powerball game is usually around 61% of the advertised jackpot. For example, if the advertised jackpot is $100 million, the cash payout option will be around $61 million before taxes.
How long does the Powerball payout take?
The time the Powerball payout takes depends on how you choose to receive the payment. If you choose the cash payout option, you will receive your winnings between 4 and 6 weeks. But if you choose the annuity option, you will receive the full amount over 30 years.
How much tax do you pay on Powerball winnings?
First, you have to pay a federal tax of between 24% to 37%, depending on the size of your win. Then, you will be charged state tax depending on your state of residence. Although you might be exempt from state tax if your state allows it. Finally, you may have to pay local taxes to the state council. This also depends on your state.
What would the Powerball payout be after taxes?
After federal, state, and local taxes, you might be left with around 37% of the advertised payout. However, this value still depends on whether you decide to collect all your winnings outright (lump sum) or annuity over many years.
