Money
Record jackpots and the tax math winners actually face
The advertised jackpot, the cash value and the amount that reaches a bank account are three very different numbers. Here is the gap, with the record board that produced them.
A billion-dollar jackpot is not a billion-dollar cheque. Between the number on the roadside sign and the money a winner can spend sit two large deductions — the discount for taking cash instead of a 30-year annuity, and income tax at the top federal rate. Together they usually remove more than half.
The record board
Advertised amounts are annuity values; the cash column is what the same prize pays as a single immediate payment, before any tax. Every one of these was won under the current ball matrices, and the first ever ten-figure jackpot arrived only in 2016.
| # | Game | Advertised | Cash value | Date | Where | Tickets |
|---|---|---|---|---|---|---|
| 1 | Powerball | $2.04B | $997.6M | November 7, 2022 | California | 1 |
| 2 | Powerball | $1.817B | $834.9M | December 24, 2025 | Arkansas | 1 |
| 3 | Powerball | $1.787B | $820.6M | September 6, 2025 | Missouri, Texas | 2 (split) |
| 4 | Powerball | $1.765B | $774.1M | October 11, 2023 | California | 1 |
| 5 | Mega Millions | $1.602B | $794.2M | August 8, 2023 | Florida | 1 |
| 6 | Powerball | $1.586B | $983.5M | January 13, 2016 | California, Florida, Tennessee | 3 (split) |
| 7 | Mega Millions | $1.537B | $877.8M | October 23, 2018 | South Carolina | 1 |
| 8 | Mega Millions | $1.35B | $724.6M | January 13, 2023 | Maine | 1 |
| 9 | Mega Millions | $1.337B | $780.5M | July 29, 2022 | Illinois | 1 |
| 10 | Powerball | $1.326B | $621.0M | April 7, 2024 | Oregon | 1 |
| 11 | Mega Millions | $1.269B | $571.9M | December 27, 2024 | California | 1 |
| 12 | Mega Millions | $1.13B | $537.5M | March 26, 2024 | New Jersey | 1 |
| 13 | Powerball | $1.08B | $558.1M | July 19, 2023 | California | 1 |
| 14 | Mega Millions | $1.05B | $776.6M | January 22, 2021 | Michigan | 1 |
Two details in that table matter more than the headline figures. First, three of the biggest prizes were shared — the January 13, 2016 Powerball jackpot was split 3 ways, turning $1.586 billion into $327.8 million of cash each. Second, the cash value is consistently around 49% of the advertised annuity, because the annuity is 30 graduated payments and the lottery only holds the present value of that stream.
Annuity or lump sum?
Both Mega Millions and Powerball offer the same two choices, and roughly nine out of ten winners take the cash.
- Annuity: 30 payments over 29 years, each one 5% larger than the last. You receive the full advertised amount, spread across three decades, and each payment is taxed in the year it arrives.
- Lump sum: the cash value — historically about 49% of the advertised figure, though the exact ratio moves with interest rates. All of it is taxable income in a single year.
Neither is universally better. The annuity is protection against yourself: it cannot be lost to a bad investment, a lawsuit or a relative with a business idea. The lump sum wins on arithmetic if you can reliably earn more than the discount rate baked into the annuity, and it gives you control of the estate planning.
The tax arithmetic
US lottery prizes are ordinary income, not capital gains. Three layers apply, and the first one is routinely mistaken for the whole bill.
| Layer | Rate | What it means |
|---|---|---|
| Federal withholding | 24% | Withheld automatically on prizes above $5,000. It is a prepayment, not a final tax. |
| Federal top bracket | 37% | For 2026 the top rate starts at $640,600 of taxable income for a single filer and $768,700 for a married couple filing jointly. A jackpot clears that in its first fraction of a percent, so effectively the whole prize is taxed at 37% — leaving about 13 points still owed at filing. |
| State income tax | 0% – ~10.9% | Florida, Texas, Washington, Tennessee, South Dakota, Wyoming, New Hampshire and Alaska levy nothing; California exempts its own lottery prizes by statute. New York is the heaviest at up to 10.9%, plus a New York City local tax. |
A worked example: the $2.04 billion ticket
The November 7, 2022 Powerball jackpot — California, a single ticket — is the largest lottery prize ever awarded. Follow the money:
| Step | Amount |
|---|---|
| Advertised annuity jackpot | $2.04 billion |
| Cash option taken by the winner | $997.6 million |
| Federal withholding at 24% | −$239.0 million |
| Additional federal tax due at filing (to 37%) | −$129.0 million |
| State tax (California exempts its own lottery) | $0 |
| Approximate net | $628.0 million |
Roughly 31% of the advertised jackpot survives — and that is the best case, in a state that does not tax the prize, with no split. A winner in New York would keep closer to half of the cash value.
Why the records are all recent
Every jackpot on the board above was won in 2016 or later, and that is not a coincidence. Both games deliberately made their jackpots harder to hit — Powerball in October 2015, Mega Millions in 2013 and 2017 — which lengthens the roll and pushes the advertised top prize higher before somebody finally wins. (Mega Millions changed course in 2025, improving the jackpot odds slightly while raising the ticket price to $5 and enlarging every lower prize.) The 2015 Powerball change is the clearest case: the first billion-dollar jackpot in history arrived roughly three months after it took effect.
Practical notes for a large win
- Deadlines are real. Claim periods run from 90 days to a year depending on the jurisdiction, and unclaimed jackpots do expire.
- Anonymity varies. A minority of states allow anonymous claims; several others permit claiming through a trust or LLC, which is why the record board lists entities rather than names in some rows.
- Non-US winners generally face 30% federal withholding instead of 24%, plus whatever their home country's treaty specifies.
- Small prizes are taxable too. There is no minimum below which winnings stop being income; the $5,000 figure is only the withholding threshold.
This page explains published rules; it is not tax advice, and rates and thresholds change every year. Confirm anything that matters with a qualified professional and with your state lottery.