Arizona jackpot hit $ 410 million: why the winner will receive significantly less

One Mega Millions lottery ticket sold in Arizona matched all six winning numbers at the draw on Tuesday, June 9th. The holder of this ticket hit the jackpot in the amount of $ 410 million, writes CNBC.

Photo: Shutterstock

While a windfall can be a life-changing bonus, the amount advertised is not what the winner will actually receive.

Regardless of whether the jackpot claims to be annuity or a one-time payment, federal and state taxes will be withheld from this amount.

For this jackpot, the cash option (the choice of the majority of the winners) is $ 316,8 million. The required 24% of the federal tax will reduce this amount by $ 76.

After that, state taxes will come into play. In Arizona, the withholding rate is 4,8%, that is, another $ 15,2 million will be deducted from the account.

That is, a cash option of $ 316,8 million will be reduced by $ 91,2 million, as a result of which the winner will receive $ 225,6 million in his bank account.

On the subject: The curse of the lottery: 11 reasons why winning a jackpot could be a disaster

But that's not all.

The maximum marginal income tax rate at the federal level is 37%. If there is no reduction in the winner’s taxable income, such as large charitable contributions, another 13%, or $ 41,2 million, will be withheld by the IRS during the tax payment period (this is April 2021 for jackpots announced in 2020).

A total of $ 117,2 million will go to the IRS.

In response to the reduction in ticket purchases during the coronavirus pandemic, Mega Millions representatives announced that the initial jackpots of future games, as well as an increase in the jackpot when there is no winner in the draw, will be based on sales and interest rates without a minimum fixed amount (the same decision was made in Powerball )

The odds of winning the Mega Millions jackpot (restored to $20) with a single ticket are slim: 1 in 302 million. For Powerball, where its value is currently $22 million, the odds of winning the top prize are slightly higher: 1 in 292 million.

Read also on ForumDaily:

5 polling sites that pay money for your opinion

How to Recognize Immigration Fraud and Protect Yourself: USCIS Recommendations

30 years choosing the same numbers: a resident of Colorado tore two lottery jackpots per day

Do you want more important and interesting news about life in the USA and immigration to America? — support us donate! Also subscribe to our page Facebook. Select the “Priority in display” option and read us first. Also, don't forget to subscribe to our РєР ° РЅР ° Р »РІ Telegram  and Instagram- there is a lot of interesting things there. And join thousands of readers ForumDaily New York — there you will find a lot of interesting and positive information about life in the metropolis.