How we calculate your lottery take-home

Where the jackpot numbers come from

Powerball and Mega Millions both advertise two different numbers for the same prize. The big number in the headline is the annuity value, which is what you receive if you take 30 graduated payments over 29 years. The smaller number is the cash value, which is the single payment available if you take the lump sum. Almost every winner takes the lump sum, so the cash value is the number that actually matters.

We pull both figures directly from official lottery sources rather than estimating one from the other. The Powerball figures come from the Texas Lottery's official game page, and the Mega Millions figures come from the Mega Millions draw data service. This matters more than it sounds: the ratio between the cash value and the advertised jackpot moves constantly with interest rates. It is not a fixed percentage. In recent draws it has ranged from roughly 43% to just over 50%. A calculator that hardcodes "about 45%" will be wrong by millions of dollars most of the time, so we use the published cash value instead.

If a live fetch fails, the site uses static emergency fallback figures rather than showing a broken page, and the calculator keeps working. Those fallback figures can be stale, so treat them as a temporary estimate until the official source is available again.

How federal tax is calculated

Lottery winnings are ordinary income to the IRS, taxed on the same progressive bracket schedule as wages. We do not apply a flat 37% to the whole prize, because that is not how the tax code works. Instead we run the lump sum through the full 2026 bracket ladder for your filing status: the first slice is taxed at 10%, the next at 12%, and so on, with only the dollars above the top threshold taxed at 37%.

On a prize large enough to reach the top bracket, this produces an effective federal rate a few tenths of a percent below 37%, not exactly 37%. We show that effective rate rather than rounding it away.

We also separate the two moments when federal tax actually hits you, because this is where most winners are caught out. The lottery withholds 24% at the moment of payout, as required for gambling winnings above $5,000. That withholding is not the bill. The remaining balance up to your true bracket total comes due when you file the following April. On a nine figure prize that gap is tens of millions of dollars, and it is money you have already received and may have already committed. Our breakdown shows the withheld amount and the April balance as separate lines for exactly this reason.

How state tax is calculated

State tax is applied to the same lump sum cash value, not to the amount left after federal tax. We use each state's top marginal income tax rate, since any Powerball or Mega Millions jackpot lands a winner in the highest bracket their state has. Ten states collect nothing: nine have no state income tax at all, and California law exempts California Lottery winnings, including Powerball and Mega Millions.

State tax can depend on both where the ticket was bought and where you live. The state that sold the ticket may tax the prize, and your home state may also tax it, sometimes with a credit for tax paid to another state. This calculator estimates one state at a time using the state you choose. It does not model residency, multistate filings, or tax credits.

Five states do not sell Powerball or Mega Millions tickets: Alabama, Alaska, Hawaii, Nevada, and Utah. Residents of those states must buy in a participating jurisdiction. The purchase state may tax the prize, and the winner's home state may also tax it. Choose the purchase state for a source-state estimate, but remember that residency rules and tax credits can change the final bill.

What this calculator does not account for

These are real simplifications, and we would rather state them plainly than let you over-trust the output. Every one of them is a place where your actual bill will differ from our figure.

• The standard deduction is not subtracted.

  We apply the bracket schedule to the entire lump sum. In reality your standard deduction reduces taxable income slightly, which would lower federal tax by roughly $6,000 for a single filer in 2026. On a $290 million lump sum that is about 0.002% of the prize, so we accept the simplification, but it does mean our federal figure is marginally high.

• State tax is applied as a flat top rate.

  Most states are progressive, so the first slice of your income is technically taxed below the top rate. At jackpot scale the difference is a rounding error, but it means our state figure is also marginally high for progressive states.

• Local and city taxes are not in the math.

  New York City residents owe roughly 3.88% city tax on top of state tax, and several Maryland counties add local income tax. We note these on the relevant state pages but do not include them in the calculated total.

• No deductions, gifting, or trust structures.

  Charitable giving, a donor advised fund, a private foundation, or claiming through a trust or LLC can all change the real outcome substantially. Large winners almost always use some of these. Our number is the unplanned baseline.

• Other income is not stacked in.

  We treat the prize as the only income for the year. Since any jackpot already fills the top bracket, adding a salary changes the total only slightly, but it is not modeled.

• The annuity path is modeled separately.

  The main calculator assumes you take the lump sum, because most winners do. For a present value comparison of the 30 year annuity against the lump sum, use the annuity vs. lump sum tool.

• Tax law changes, and estimates age.

  Federal brackets are adjusted every January and states revise rates on their own schedules. We update these deliberately rather than automatically, so there can be a lag between a law changing and this site reflecting it.

How often the numbers update

Primary sources

Every tax figure on this site traces to one of these. We verify bracket numbers against the original IRS publication rather than secondary reporting.

• Federal tax brackets and standard deductions

  IRS Revenue Procedure 2025-32 (2026 tax year, post-OBBBA inflation adjustments)

• Federal withholding rule on gambling winnings

  IRS Publication 525 and Topic No. 419

• State top marginal income tax rates

  Tax Foundation 2026 state individual income tax rates, cross-checked against state revenue departments

• Powerball advertised jackpot and cash value

  Texas Lottery official Powerball page

• Mega Millions advertised jackpot and cash value

  Mega Millions official draw data service

• Jackpot odds and prize tiers

  Powerball.com and MegaMillions.com published odds

Corrections

If a number here is wrong, we want to fix it. Tax rates change, states pass new legislation, and parsing official pages is imperfect. If you spot a figure that does not match an official source, please get in touch with the page and the source you checked against, and we will correct it.

Nothing on this site is tax, legal, or financial advice. It is a transparency tool for understanding the scale of the gap between an advertised jackpot and an actual payout. Before making decisions about a real prize, talk to a CPA or tax attorney.