Advertisement
U.S. markets closed
  • S&P 500

    5,137.08
    +40.81 (+0.80%)
     
  • Dow 30

    39,087.38
    +90.98 (+0.23%)
     
  • Nasdaq

    16,274.94
    +183.04 (+1.14%)
     
  • Russell 2000

    2,076.39
    +21.55 (+1.05%)
     
  • Crude Oil

    79.81
    -0.16 (-0.20%)
     
  • Gold

    2,091.60
    -4.10 (-0.20%)
     
  • Silver

    23.25
    +0.10 (+0.43%)
     
  • EUR/USD

    1.0845
    +0.0038 (+0.35%)
     
  • 10-Yr Bond

    4.1800
    -0.0720 (-1.69%)
     
  • GBP/USD

    1.2662
    +0.0036 (+0.28%)
     
  • USD/JPY

    149.9890
    +0.0050 (+0.00%)
     
  • Bitcoin USD

    62,827.50
    +897.23 (+1.45%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,682.50
    +52.48 (+0.69%)
     
  • Nikkei 225

    39,910.82
    +744.62 (+1.90%)
     

Powerball Jackpot: Best and Worst States for Winners

karenfoleyphotography / Shutterstock.com
karenfoleyphotography / Shutterstock.com

The Powerball lottery set a record in November 2022, with a drawing worth $2.04 billion. It got over a third of the way there in February before a player in Washington state won the $754.6 million jackpot. It was the sixth-highest Powerball amount ever.

On July 19, the Powerball hit $1 billion — the third-largest total ever.

Warren Buffett’s Financial Plan to Tackle America’s Debt: ‘I Can End the Deficit in 5 Minutes’
Stimulus Update: Child Tax Credit Expansion Still ‘Achievable’ by End of 2023 — Where Issue Currently Stands in Congress

While $1 billion is a nice chunk of change, what ends up in the bank account can significantly change depending on where the lucky winner resides.

Indeed, while in some countries lottery winnings are not taxed, in the U.S. they are — and it varies state by state.

According to the Powerball website, a jackpot winner may choose to receive the prize as an annuity, paid in 30 graduated payments over 29 years, or as a lump sum payment. But both prize options are prior to federal and jurisdictional taxes.

First off, all winnings over $5,000 are subject to tax withholding by lottery agencies at the rate of 24%, according to TurboTax. And, if you opt to take the winnings in a lump sum, you will be in the highest tax bracket, which is 37%.

On top of that, there are state taxes, which vary wildly. Let’s take a look at the best and worst states to win the jackpot.

Best States To Win Powerball

There are eight states that do not tax Powerball winnings: California, Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming. Pennsylvania, North Dakota, Indiana and Ohio also make our list of best states.

Jaspreet Singh Shares 5 Ways To Grow $10k to $100k in Three Years
I’m a Self-Made Millionaire: Here Are 3 Things I Never Waste Money On

1. California, Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming

If you’re lucky enough to have bought your winning ticket in one of these states, you won’t pay any taxes at the state level.

Read more: 6 Ways To Become Rich on an Average Salary

powerofforever / Getty Images
powerofforever / Getty Images

2. North Dakota

State tax: 2.9%

ANNUITY

  • Subtotal after federal taxes: $631,111,350

  • State taxes: $966,667

  • Annual payments: $20,070,378

  • Total net payout: $602,111,340

CASH

  • Subtotal after federal taxes: $325,621,045

  • State taxes: $14,987,200

  • Total net payout: $310,633,845

3. Pennsylvania

State tax: 3.07%

ANNUITY

  • Subtotal after federal taxes: $21,037,045

  • State taxes: $1,023,333

  • Annual payments: $20,013,712

  • Total net payout: $600,411,360

CASH

  • Subtotal after federal taxes: $325,621,045

  • State taxes: $15,865,760

  • Total net payout: $309,755,285

ChrisBoswell / Getty Images/iStockphoto
ChrisBoswell / Getty Images/iStockphoto

4. Indiana

State tax: 3.15%

ANNUITY

  • Subtotal after federal taxes: $21,037,045

  • State taxes: $1,050,000

  • Annual payments: $19,987,045

  • Total net payout: $599,611,350

CASH

  • Subtotal after federal taxes: $325,621,045

  • State taxes: $16,279,200

  • Total net payout: $309,341,845

Sean Pavone / Shutterstock.com
Sean Pavone / Shutterstock.com

5. Ohio

State tax: 3.99%

ANNUITY

  • Subtotal after federal taxes: $21,037,045

  • State taxes: $1,330,000

  • Annual payments: $19,707,045

  • Total net payout: $591,211,350

CASH

  • Subtotal after federal taxes: $325,621,045

  • State taxes: $20,620,320

  • Total net payout: $305,000,725

Also: Check Your $2 Bills — They Could Be Worth Thousands

dennizn / Shutterstock.com
dennizn / Shutterstock.com

Worst States To Win Powerball

The five worst states for lottery taxation are New York, New Jersey, Oregon, Minnesota and Maryland. Washington, D.C., also is included in this bottom five.

Majestic_Aerials / Getty Images
Majestic_Aerials / Getty Images

5. Maryland

State tax: 8.95%

ANNUITY

  • Subtotal after federal taxes: $21,037,045

  • State taxes: $2,983,333

  • Annual payments: $18,053,712

  • Total net payout: $541,611,360

CASH

  • Subtotal after federal taxes: $325,621,045

  • State taxes: $46,253,600

  • Total net payout: $279,367,445

culbertson / Getty Images/iStockphoto
culbertson / Getty Images/iStockphoto

4. Minnesota

State tax: 9.85%

ANNUITY

  • Subtotal after federal taxes: $21,037,045

  • State taxes: $3,283,334

  • Annual payments: $17,753,712

  • Total net payout: $532,611,360

CASH

  • Subtotal after federal taxes: $325,621,045

  • State taxes: $50,904,800

  • Total net payout: $274,716,245

I’m a Financial Advisor: Here Are 6 Things My Clients Don’t Like to Hear — and Why I Tell Them Anyway

GarysFRP / iStock.com
GarysFRP / iStock.com

3. Oregon

State tax: 9.9%

ANNUITY

  • Subtotal after federal taxes: $21,037,045

  • State taxes: $3,300,000

  • Annual payments: $17,737,045

  • Total net payout: $532,111,350

CASH

  • Subtotal after federal taxes: $325,621,045

  • State taxes: $51,163,200

  • Total net payout: $274,457,845

©Shutterstock.com
©Shutterstock.com

2. New Jersey and Washington, D.C.

State/District tax: 10.75%

ANNUITY

  • Subtotal after federal taxes: $21,037,045

  • State taxes: $3,583,334

  • Annual payments: $17,453,712

  • Total net payout: $523,611,360

CASH

  • Subtotal after federal taxes: $325,621,045

  • State taxes: $55,556,000

  • Total net payout: $270,065,045

dennizn / Shutterstock.com
dennizn / Shutterstock.com

1. New York

State tax: 10.9%

ANNUITY

  • Subtotal after federal taxes: $21,037,045

  • State taxes: $3,633,333

  • Annual payments: $17,403,712

  • Total net payout: $522,111,360

CASH

  • Subtotal after federal taxes: $325,621,045

  • State taxes: $56,331,200

  • Total net payout: $269,289,845

More From GOBankingRates

(These numbers are based on a $1 billion jackpot.)

This article originally appeared on GOBankingRates.com: Powerball Jackpot: Best and Worst States for Winners

Advertisement