State and federal tax on the Mega Millions jackpot will take a big bite out of the massive prize for July 26, 2022.
So how much money could aNearly all lottery winners over the years have opted for the cash option and receive the money in one lump sum rather than the annuity, which is always the advertised jackpot.For the cash option, the winner would first have 24% — or $117,086,000 — in federal taxes chopped off the prize amount.
That’s before state taxes that vary. A potential winner who buys a ticket in New Jersey would then pay an additional 8% — or $39,032,000 — in state taxes leaving the lucky winner with $331,782,000,Should a ticket holder from New Jersey opt for the annuity and hit the jackpot, he or she would pay $199,200,000 in federal taxes and another $66,400,000 in state taxes for a prize of $564,400,000.
Someone who wins the jackpot and chooses the annuity receives one immediate payment and then 29 annual payments, each of which are 5% more than previous year, according to Mega Millions officials. It’s also worth noting that if tax rates increase during the term of the annuity, then taxes are withheld at the rate that is in place at the time of the scheduled payment.
Player select the cash or annuity option when purchasing tickets. The annuity option can be changed to cash when claiming a prize, but a cash option cannot be switched to annuity, a New Jersey Lottery spokeswoman said.and the fourth-largest in U.S. lottery history. The three largest jackpots are more than $1 billion.
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