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There is officially one winner for the $1.128 billion Mega Millions jackpot — and the taxman will accept for a sizable share, experts say.
A single ticket sold in New Jersey won the game’s fifth-largest grand prize after homologous all six numbers drawn Tuesday night, Mega Millions announced Wednesday. The final jackpot dropped from an guessed $1.13 billion to $1.128 billion based on actual ticket sales.
The lucky winner will choose between two opportunities: an annuitized prize worth $1.128 billion or a lump-sum payout of $536.6 million cash.
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Regardless of the payout option, “you’re losing almost half of it” to taxes, said Albert Campo, a certified clear accountant and president of AJC Accounting Services in Manalapan, New Jersey.
New Jersey taxes prizes over $10,000 and the winner determination owe millions to the state, including a mandatory withholding, on top of their federal tax bill, he said.
Eight states, including California, Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming, do not levy revenues taxes on lottery winnings.
How much the winner could owe in taxes
Before seeing a penny of the jackpot, the winner inclination pay a 24% mandatory upfront federal withholding to the IRS.
If they choose the $536.6 million cash option, the 24% holding automatically reduces the prize by about $129 million.
However, the jackpot pushes the winner into the top