Mega Millions Jackpot Nears $500 Million: Here’s How Much A Winner Would Take Home After Taxes

Topline

The Mega Millions jackpot inched up to nearly $500 million Saturday morning after no winning tickets were drawn on Friday, though a lucky winner would take home less than a third of that amount after taxes are deducted.

The Mega Millions jackpot reached $493 million on Saturday. Getty Images

Key Facts

With no winning tickets matching the five white balls and one red “megaball” in Friday night’s drawing, the Mega Millions jackpot hit a whopping $493 million—the 14th biggest jackpot in the history of the game and the latest major jackpot this year, after a Powerball ticket holder won a $842 million jackpot last month.

A lucky ticket holder who meets the astronomical odds of matching all six balls to win the jackpot has the option of taking the jackpot over 30 annual installments or as an up-front cash lump sum of $231.1 million, though federal taxes would bring their winnings down even further.

Under the lump sum option—by far the most popular choice among lottery winners—a mandatory 24% federal tax withholding would reduce the ticket holder’s winnings to just over $175.6 million.

A federal marginal rate as high as 37%, which depends on the winner’s taxable income and large tax deductions such as charitable contributions, would reduce it to as low as $145.6 million.

State taxes could continue to cut away at the prize, though not all states tax lottery winnings.

Under the installment route, the ticket holder would receive annual payments averaging just over $16.4 million before taxes, though the full 37% federal marginal rate would reduce those yearly payments to just over $10.3 million.

What To Watch For

The next Mega Millions drawing is slated for Tuesday night at 11 p.m. EST. The Powerball jackpot, meanwhile, does not lag far behind the Mega Millions, with a jackpot of $306 million and a cash option of $144.5 million. The next Powerball drawing takes place at 11 p.m. Saturday night.

Big Number

$2.04 billion. That’s how much a lucky ticket holder in Altadena, California, won in a Powerball jackpot in November 2022, the biggest jackpot in U.S. history—that prize was reduced to approximately $628 million after federal taxes, after the winner opted to take a lump sum instead of annual payouts. The mouth-watering size of lottery jackpots has skyrocketed in recent years due to a pair of rules changes that worsened the odds of winning the grand prizes, leading to longer streaks of unsuccessful drawings and bigger and bigger jackpots. All of the 10 biggest lottery jackpots have been claimed in the last 10 years. As a result of those rules changes—which increased the pools of balls to choose from—the odds of winning the Mega Millions on a single $2 ticket stand at an astronomical one in nearly 302.6 million. The odds of winning the game’s smallest $2 prize stands at a palatable one in 37.

Further Reading

Powerball Ticket Sold In Michigan Wins $842 Million Jackpot—Here’s How Much The Winner Will Take Home After Taxes (Forbes)

Here Are The Top 10 Lottery Jackpots Of All Time—As Mega Millions Reaches $910 Million (Forbes)