Winning powerball ticket for $768m is sold in wisconsin and is third largest in us history

Winning powerball ticket for $768m is sold in wisconsin and is third largest in us history

Are lottery prizes taxable?

Lottery winnings of $600.01 and over are subject to Federal Withholding tax.  For
winnings of $600.01, up to and including $5,000, you will be issued a W-2G form
to report your winnings on your federal income tax form.  For winnings of
$5,000.01 and over, your state’s Department of Revenue removes the 24 percent federal
withholding before you receive your winnings check (or, if it is
an annuity, from each winnings check).  You then receive a W-2G form with each
check to submit with your 1040 form to show that the 24 percent federal
withholding already has been paid.  In addition to federal tax, your state will
make additional withholdings for taxes, and most states will deduct other money that
you may owe to the state, such as back taxes, child support, loan payments, etc. 
In addition, like the federal tax withholding, the state tax withholding at the time
of prize payout may not be the total state tax owed at the end of the year. 
You must consult your state division of taxation for more information about the total
state tax requirements for lottery winners.

The state tax withholdings are as follows:

Arizona  5% state withholding (Arizona residents), 6% state withholding (non-Arizona residents)
Arkansas  7% state withholding
California  No state tax on lottery prizes
Colorado  4% state withholding
Connecticut  6.99% state withholding
Delaware  No state tax on lottery prizes
Florida  No state tax on lottery prizes
Georgia  6% state withholding
Idaho  6.925% state withholding
Illinois  4.95% state withholding
Indiana  3.23% state withholding
Iowa  5% state withholding
Kansas  5% state withholding
Kentucky  5% state withholding
Louisiana  5% state withholding
Maine  5% state withholding
Maryland  8.95% state withholding (Maryland residents), 8% state withholding (non-Maryland residents)
Massachusetts  5% state withholding
Michigan  4.25% state withholding
Minnesota  7.25% state withholding
Mississippi  5% state withholding
Missouri  4% state withholding
Montana  6.9% state withholding
Nebraska  5% state withholding
New Hampshire  No state tax on lottery prizes
New Jersey  8% state withholding
New Mexico  6% state withholding
New York  8.82% state withholding, plus: 3.876% (NYC residents), 1.323% (Yonkers residents)
North Carolina  5.499% state withholding
North Dakota  2.9% state withholding
Ohio  4% state withholding
Oklahoma  4% state withholding
Oregon  8% state withholding
Pennsylvania  3.07% state withholding
Puerto Rico  No state tax on lottery prizes
Rhode Island  5.99% state withholding
South Carolina  7% state withholding
South Dakota  No state tax on lottery prizes
Tennessee  No state tax on lottery prizes
Texas  No state tax on lottery prizes
U.S. Virgin Islands  † Unknown State Tax Rate
Vermont  6% state withholding
Virginia  4% state withholding
Washington  No state tax on lottery prizes
Washington, D.C.  8.5% state withholding
West Virginia  6.5% state withholding
Wisconsin  7.65% state withholding
Wyoming  No state tax on lottery prizes

† This state/jurisdiction has not responded to our requests for this information.

Jackpot! A lucky lotto player in California had all the winning numbers after Saturday’s Powerball drawing, lottery officials said.

The grand prize reached an estimated $447.8 million.

The winning ticket was sold at a store in Menifee, southeast of Los Angeles.

Matthew Alberre, the manager of family-owned Marietta Liquor, told KCAL/KCBS he couldn’t believe the news when he got a call from a lottery representative on Saturday night. But it’s still unclear who bought the ticket from his store.

The winning numbers were 20, 26, 32, 38, 58 and the Powerball was 3.

The massive jackpot came in at tenth in the list of the largest awarded US lottery prizes of all time — a list that includes Mega Millions and Powerball winnings, the U.S.’s two largest games. Saturday night’s total surpasses the $435 million a jackpot claimed by someone in Indiana in February. That winner used a corporation to shield his or her identity.

If it seems like huge Powerball jackpots have become more common, that’s because they have.

Saturday’s $447.8 million prize means that six of the 10 largest Powerball jackpots ever have happened since the start of 2016.

The reason: Powerball changed its formula in October 2015 to give players more numbers to choose from.

And more numbers mean longer odds of a winner. The odds of winning Powerball are now 1 in 292 million, or 0.0000003%. Before the switch, the Powerball odds were 1 in 175 million.

With fewer winners, the jackpot has the chance to grow bigger week after week.

The biggest jackpot ever took place in January 2016, soon after the odds changed. That payout reached a record $1.6 billion — the one and only time it has crossed the billion dollar mark. The Powerball prize also climbed above $400 million in May, July and November of last year, in addition to the $435 prize in February.

Meanwhile, the Mega Millions game, which costs half as much to play, has only had four jackpots in its history that topped $400 million. Only one of those big payouts, a $536 million jackpot, came last year. The odds against winning Mega Millions are 1 in 259 million.

Of course, the size of those jackpots are inflated. They assume the winner takes annuity payments spread out over 29 years.

But virtually every jackpot winner chooses to take a smaller, lump sum payment up front. The lump sum value of Saturday’s $447.8 million jackpot could be close to $300 million. And of course, no matter how the winners or winner decide to accept their earnings, they’ll have an enormous tax bill.

Powerball and Mega Millions are now available in 44 states. All of them say that the profits provide billions in funding to schools and other social programs. But many economists argue that it’s a regressive tax, since poor and working class individuals spend a much larger percentage of their money on lottery tickets than wealthier consumers. Americans spent $73 billion on lottery tickets in 2015, the most recent year for which data is available. That’s more than they spent on music, movies, books, video games and sports tickets, combined.

Correction: An earlier version of this story stated that this was the seventh largest jackpot in U.S. history. It is the tenth largest.

CNNMoney (New York) First published June 11, 2017: 1:02 AM ET

What is the Power Play?

Power Play is an option that is currently offered in all states that sell Powerball tickets except California.  For an extra $1.00 per ticket you can increase your non-jackpot prize winnings by 2, 3, 4, 5, or 10 times.  (The 10 times Power Play is only available when the jackpot is $150 million or less.)  The Power Play number is randomly drawn from a pool of multipliers that includes two 5Xs, three 4Xs, 13 3Xs, and 24 2Xs, plus one 10X when the jackpot is $150 million or less.

Power Play is not available in California because of state law that requires all lottery prizes to be paid out on a pari-mutuel basis.

The Power Play multiplier number is chosen at random just before the Powerball winning numbers are drawn.

A player must choose the Power Play option when they buy their Powerball ticket, and then the ticket must match one of the 9 Ways to Win (except the jackpot) before the multiplier takes effect.  Power Play costs an extra $1 per play.  See How to Play Powerball for more information.

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