The cash payout for Powerball varies depending on the jackpot amount and the winners choice of payout option. The advertised cash value of the lottery changes with each drawing, and the winner can choose to receive the payout in one of two ways:
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Lump sum payment: This is a one-time payment of the cash value of the jackpot, which is typically less than the advertised jackpot amount. The lump sum payout is subject to federal taxes, which are currently at a rate of 24% .
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Annuity: This is a series of 30 graduated payments over 29 years, with each payment increasing by 5% each year. The annuity payout is not subject to federal taxes upfront, but each payment is taxable as it is received.
For example, the estimated cash value of the Powerball jackpot on October 9, 2023, was $679.8 million, while the advertised jackpot amount was $1.55 billion. If the winner chooses the lump sum payout option, they would receive $551.7 million before taxes, and after federal taxes, they would end up with $417.2 million. If the winner chooses the annuity payout option, they would receive 30 graduated payments over 29 years, with each payment increasing by 5% each year.
