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Posted: Monday, Feb 04,2019 | Time: 05:18 am | Edited by: The Lottery Lab Staff
Powerball is the favorite multi-state lotto game of lottery players across the US. Wednesday and Saturday are known as “Powerball Day” for enthusiastic players because drawings for Powerball take place twice a week on every Wednesday and Saturday. The jackpot for Powerball starts at $40 million and increases by 5% after every drawing if no winner is drawn. The prize has no limit and the biggest jackpot ever won in Powerball was worth $1.5 Billion. It was split between three winning tickets. The second-largest jackpot was worth $700 million and was won by Mavis Wanczyk single-handedly in 2017. Technically, that is the largest jackpot ever won and claimed by a single winning ticket. Mavis Wanczyk might be lucky enough to win an enormous amount but she certainly did not get all of it. There are legal formalities, federal taxes, and state taxes that all take a bite out of the prize. The federal tax is 25% of the winning amount (and 30% for foreigners) whereas the state tax depends upon the state you're residing in. Another factor affecting your overall take-home cash is what payment method you select. You have the option of getting paid in a lump sum or an annuity. With the annuity, you would receive 30 installments over the time span of 29 years (you get the first installment immediately). With the lump sum, you get all your winnings in one shot minus the taxes. This can leave you with almost half of the gross amount whereas with the annuity you pay taxes on the amount you receive every year which can be a lot less than the tax you on your lump-sum payment.
For more details, read: Big Decision: Lump Sum or AnnuityThere are some states which do not tax lottery winners like California but then there are states like New York where winners have to pay up to 8.82% of their winning amount. Here is a basic guide to the winning amount you would receive after winning a Powerball jackpot worth $700 Million on a state-by-state basis.