The Mega Millions jackpot climbed to $687 million—the second biggest prize of the year so far
After no tickets matched all six numbers drawn on Tuesday night, although the eventual winner will take home a much smaller amount after paying their taxes.
If a winner emerges in the next draw, they can choose between a $687 million payout spread over 30 annual installments in 29 years or a lump sum cash payment of $332.3 million—usually the preferred choice.
The lump sum amount drops to $252.54 million after a mandatory federal tax withholding of 24%.
Depending on their taxable income, the winner could then face a federal marginal rate as high as 37%, dropping their winnings to $209.35 million.
If the lottery winner chooses the installment option, their annual payments of around $22.9 million would drop to $14.42 million, if the 37% federal marginal rate is applied.
Aside from federal taxes, the winner may face additional levies from their state of residence, as some states like New York tax lottery winnings at 10.9%, while others like Texas, Florida, and California don’t.