How much money would you actually take home if you win $1 billion Powerball in California?

If you win the Powerball drawing on Wednesday, you won’t exactly leave with the $1 billion jackpot, but at least it’s more than what you started with.

Lottery earnings are subject to federal and, sometimes, state taxes, according to the USA Mega website. For example, California residents won’t get their jackpot taxed, but if you live in Arizona, New York or D.C., expect some more dollars to be knocked off your prize.

State taxes vary by state, so while Arizona residents will get taxed 2.5%, D.C. residents are stuck with 10.75%.

How much will the jackpot be taxed in California?

You get two choices when you win the jackpot — get paid annually over time or get a one-time cash payout.

It’s important to note that these are estimates based on 2022 taxes, your filing status and how you spend the winnings.

Annuity

With annuity, you’ll get an average of 30 payments of about $33,333,333 each year before taxes, according to USA Mega.

Lottery winnings that are more than $5,000 get a federal tax of 24%, therefore, you’ll be cutting $8 million from the annual payments. There are also additional federal taxes of about 37%. In total, you’ll be paying more than $12 million..

Your total annual payment in California would be about $21,037,045. After 30 years, this makes your total jackpot $631,111,350.

Cash payout

For a lump sum payout, you’ll get $516,800,000.

According to State Farm, these payouts are usually about 60% of the total value.

After all the federal taxes, including the 24% tax, your total jackpot will be $325,621,045.

This story was originally published July 18, 2023 at 9:54 AM with the headline "How much money would you actually take home if you win $1 billion Powerball in California?."