About the Lottery Payout Calculator
An advertised jackpot is the total of a 30-year annuity, not a cheque you can cash tomorrow. This lottery payout calculator shows what you would actually take home under both options: the one-time cash (lump-sum) value and the annuity paid in 30 yearly instalments, each after estimated federal and state income tax.
For Powerball and Mega Millions the annuity is made of 30 payments that grow by 5% a year, which is the default here. The cash option is usually somewhere around 45%–50% of the advertised jackpot, depending on interest rates on the day of the draw — enter the figure the lottery publishes for the draw you are looking at. For other games you can change the number of payments and turn off the growth.
Taxes are simplified to a flat combined rate using 2026 federal rules. In the US, 24% federal tax is withheld from lottery prizes over $5,000, but a jackpot puts almost all of it in the top 37% bracket, so 37% is the realistic default. State tax ranges from 0% (for example Florida, Texas and California for lottery prizes) to over 10% (New York plus New York City). The break-even return tells you what yearly investment return the lump sum would need to beat the annuity.
With the default inputs, the lump sum after tax is $27,840,000.00. Change any value above to recalculate instantly.
How to use the lottery payout calculator
- 1Enter the advertised jackpot.
- 2Enter the cash value as a percentage of the jackpot (from the lottery’s website for that draw).
- 3Set your federal and state tax rates.
- 4Keep 30 payments with 5% growth for Powerball or Mega Millions, or change them for other games.
- 5Compare the after-tax lump sum, the annuity total and the break-even return.
Formula and method
The lump sum is the advertised jackpot multiplied by the cash-option percentage, less tax at the combined federal and state rate. The annuity is a graduated series: n payments that each grow by g, sized so that together they add up to the advertised jackpot. The first payment is therefore J × g ÷ ((1 + g)ⁿ − 1); with no growth, each payment is simply J ÷ n.
Each annuity payment is taxed at the same combined rate, which is a simplification — actual tax depends on your other income, deductions and future tax law. The break-even return is the discount rate at which the present value of the after-tax annuity payments (first one paid immediately) equals the after-tax lump sum, found by bisection.
- J
- Advertised (annuity) jackpot
- c
- Cash option as a fraction of the jackpot
- t
- Combined federal + state tax rate
- g
- Annual increase in annuity payments
- n
- Number of annuity payments
Worked examples
$100 million jackpot, 48% cash, 37% + 5% tax
The cash option is $48 million; after 42% combined tax you keep $27.84 million. The annuity pays $58 million after tax over 30 years, starting at about $873,000 and rising to about $3.59 million. The lump sum wins only if you can earn more than about 4.56% a year on it.
$500 million jackpot in a no-state-tax state
A 46% cash value is $230 million, or $144.9 million after 37% federal tax. The annuity totals $315 million after tax, with a first payment of about $4.74 million.
$1 million prize, 20 equal payments
Cash of $600,000 less 28% tax leaves $432,000. The annuity pays $50,000 a year, or $36,000 after tax, totalling $720,000 — the lump sum needs about a 6.2% return to keep up.
Frequently asked questions
How much tax do you pay on lottery winnings?+
In the US, lottery prizes are ordinary income. The lottery withholds 24% federal tax on prizes over $5,000, but a large jackpot is taxed mostly at the top 37% rate, so winners usually owe more at filing time. State tax is added on top in most states.
Is it better to take the lump sum or the annuity?+
The lump sum gives you control and lets you invest immediately; the annuity pays more in total and protects against overspending. Financially, the lump sum wins if you can reliably earn more than the break-even return shown here after tax.
Why is the cash value so much less than the jackpot?+
The advertised jackpot is the sum of 30 annuity payments. The cash option is roughly what the lottery would need to invest today to fund those payments, so it depends on current interest rates.
Which states do not tax lottery winnings?+
States with no income tax on lottery prizes include Florida, Texas, Tennessee, Washington, Wyoming, South Dakota and New Hampshire (no income tax), plus California and Delaware, which exempt state lottery prizes. Rules can change, so check your state tax agency.
How do Powerball annuity payments work?+
The Powerball and Mega Millions annuities make one immediate payment followed by 29 annual payments, each 5% larger than the last. If the winner dies, remaining payments go to the estate.
Tax results are estimates based on published rules and simplified assumptions. They are not tax advice — check official guidance or a tax professional for your situation.