Topline
The Mega Millions jackpot rose to $965 million – the second-largest lottery prize of the year so far – after no ticket matched all six numbers drawn on Tuesday night, although the eventual winner will take home a much smaller payout after taxes and deductions.
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Key facts
The six figures drawn on Tuesday evening were 10, 13, 40, 42, 46 and Mega Ball 1.
If a winner emerges in the next drawing, they will have the choice of winning the $965 million prize, spread over 30 annual installments, or a lump sum cash payout of $445.3 million – the preferred option for most winners.
If the winner chooses the cash prize, their winnings will first drop to approximately $338.4 million after a mandatory 24% federal withholding is applied.
The winner would likely face a federal marginal rate as high as 37%, depending on their taxable income, further reducing their winnings to about $280.5 million.
If the installment route is chosen, the winner’s annual payments would drop from approximately $32.16 million to $20.26 million after the 37% federal marginal rate is applied.
Depending on the home state, the winner may face additional taxes, as some states, such as New York, tax lottery winnings at 10.9%, while others, such as Texas, Florida and California, do not.
What should you pay attention to?
The next Mega Millions drawing takes place on Friday evening. The Powerball jackpot, which has risen to $512 million, will be drawn for the next time on Wednesday evening.
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