The Powerball jackpot has reached a record-breaking $565 million, making it the largest lottery prize of the year so far. However, if a winner emerges, they can expect to receive significantly less after paying federal and state taxes.
A winning ticket would normally receive $258.8 million as a lump sum payout. After applying a 24% federal withholding tax, the amount drops to $196.7 million. Depending on their taxable income, the winner may face an additional 37% marginal rate, further reducing the prize to $163 million.
Alternatively, the winner can choose annual installments of around $18.8 million over 30 years. If they opt for this option and apply for a state tax credit, the payment amount would be reduced to $11.8 million, assuming a 37% federal marginal rate.
The odds of winning the Powerball jackpot are astronomical, standing at 1 in 292.2 million. The next draw is scheduled for Saturday night, followed by the Mega Millions lottery’s $198 million jackpot prize on Friday.
Source: https://www.forbes.com/sites/siladityaray/2025/08/14/powerball-jackpot-rises-to-565-million-heres-what-the-winner-could-take-home-after-taxes