If the Mega Millions winner takes the lump sum, right away nearly a quarter of the prize is withheld for federal taxes. And they're not off the hook yet.
That's because lottery winnings are treated as income by the federal government and most states, so the jackpots are subject to state and federal income taxes. However, there are 13 states that, or receive their winnings in a lump sum of cash. If they pick the annuity, they will eventually receive the entire advertised jackpot over the span of three decades. Most jackpot winners go with the lump sum, which means they get the “cash value” of that jackpot. For Tuesday's Mega Millions $1.
But for example, if the winning ticket had been bought in California, which doesn't have a state tax on lottery prizes, the net payout would have dropped only to $338,666,812 for the cash option,
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Mega Millions and Powerball Jackpots Continue to GrowBoth Mega Millions and Powerball jackpots have reached significant amounts after multiple rollovers. The Mega Millions jackpot is currently estimated at $875 million, while the Powerball jackpot stands at $600 million. The last Mega Millions jackpot was won on December 8, 2023, in California, and this is only the sixth time in the game's history that the jackpot has reached such a high amount. The odds of winning the grand prize in Mega Millions are 1 in 302,575,350. Powerball tickets are also available for $2.
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