Mega Millions Lottery Winner of $1.28B Will Get $433.7M Post Taxes
The winner of the $1.2 billion Mega Millions lottery will receive $433.7 million after taxes. The lottery prize of $1.28 billion is the second largest by the lottery firm.
The Mega Millions lottery debuted on August 31, 1996. Six states participated in the initial drawing, which was held on September 6, 1996: Georgia, Illinois, Maryland, Massachusetts, Michigan, and Virginia.
The lottery has previously given away $1.537 billion to the jackpot winner on October 23, 2018. Now the winner, who is reported to be from Illinois, has won a lottery of $1.28 billion. But after the heavy taxes, the winner will not be a billionaire anymore.
Winning a billion-dollar lottery and ending up as a millionaire
The $1.28 prize can be claimed immediately or slowly over time. But if the winner wishes to take it all home at once, the initial amount he gets is $747.2 million after the initial taxes. Well, the tax deductions are just beginning as the IRS levies another 24% tax that makes the winner end up with $567,872,000.
The rest of the amount that vests with the winner is again at the risk of facing a 37% federal income tax rate. If the winner falls into the top 37% tax bracket, then an additional tax is again levied on the winner. The additional $97,136,000 in tax is the result of the difference between the 37 percent tax rate and the 24 percent withholding tax rate on these figures.
So, combining the 24% withholding tax and the 13% extra tax to be paid on April 15, the winner will face a federal tax of $276,464,000. At last, the Mega Millions billionaire ends up with $470,736,000 after all the tax payments.
If that is not done, the winner may have to face additional state taxes. Since the ticket was purchased in Illinois and considering the winner is from there, that is a 4.95% income tax that amounts to $37 million. That is quite far from the winner’s billionaire title.