What does a Powerball annuity pay?
Enter the advertised jackpot to see every annuity payment before and after tax, and compare it with the cash option. The results are estimates, not tax or financial advice.
- Annuity after tax
- $64,499,992.50
A $100,000,000.00 jackpot paid in 30 yearly payments: the first payment is $1,505,143.51, and all payments come to $64,499,992.50 after the estimated tax.
- Paid
- paid in 30 yearly payments
- First payment
- $1,505,143.51
- First payment after tax
- $998,240.16
- Last payment
- $6,195,374.77
- Federal tax on the annuity
- $35,500,007.50
- State tax on the annuity
- $0.00
- Withheld from the first payment
- $361,234.44
- Years
- 30
Annuity after tax: $64,499,992.50. A $100,000,000.00 jackpot paid in 30 yearly payments: the first payment is $1,505,143.51, and all payments come to $64,499,992.50 after the estimated tax.
Where does each payment go?
What does every payment look like?
The results are estimates for information only. They are not financial, tax, or legal advice. Check the numbers with your lender or a qualified professional before you decide. Terms of use
How to calculate
Splits an advertised lottery jackpot into graduated annuity payments that grow 5% a year, and estimates the 2026 federal and state income tax on each payment and on the lump-sum cash option.
Example with the default inputs (Advertised jackpot $100,000,000.00, Payments 30, Yearly increase 5%, Filing status Single, State and local tax rate 0%): A $100,000,000.00 jackpot paid in 30 yearly payments: the first payment is $1,505,143.51, and all payments come to $64,499,992.50 after the estimated tax.
Method: First payment = jackpot × g ÷ ((1 + g)ⁿ − 1), each later payment × (1 + g); federal tax on each payment = 2026 brackets on (payment − standard deduction); state tax = payment × state rate.
- The advertised jackpot is the sum of the annuity payments; the first is paid now and the rest yearly, each larger by the yearly increase.
- Each payment is taxed as your only income that year, at the 2026 federal brackets and standard deduction, in every future year (brackets change each year with inflation and the law).
- Federal withholding is 24% of winnings over $5,000; the tax due at the top rate of 37% is more, and you pay the difference when you file.
- State and local tax is one flat rate you enter; some states do not tax lottery winnings, and some cities add their own tax.
- The cash option is taxed in full in one year.
- Estimates only, not tax advice.
Worked examples
Each example is checked against the calculator on every build.
- Advertised jackpot $300,000.00, Payments 3, Yearly increase 0%, Filing status Single, State and local tax rate 0% gives First payment $100,000.00, First payment after tax $86,830.00, Annuity after tax $260,490.00, Federal tax on the annuity $39,510.00, Withheld from the first payment $24,000.00.Source: hand calculation in content.mdx: 100,000 − 16,100 = 83,900 taxable; 1,240 + 4,560 + 7,370 = 13,170 tax
- Advertised jackpot $100,000,000.00, Payments 30, Yearly increase 5%, Filing status Single, State and local tax rate 0% gives First payment $1,505,143.51, Last payment $6,195,374.77, Annuity after tax $64,499,992.50.Source: hand calculation in content.mdx: 100,000,000 × 0.05 ÷ (1.05³⁰ − 1); last = first × 1.05²⁹ (Powerball: 30 graduated payments, 5% a year)
- Advertised jackpot $100,000,000.00, Payments 30, Yearly increase 5%, Filing status Married filing jointly, State and local tax rate 5%, Cash option $45,000,000.00 gives Federal tax on the cash option $16,560,250.50, Cash option after tax $26,189,749.50.Source: hand calculation in content.mdx: IRS 2026 joint brackets on 45,000,000 − 32,200; state 5% = 2,250,000
How it works
The payments. The advertised jackpot J is paid as n payments, each larger than the one before by the yearly increase g (5% for Powerball and Mega Millions, n = 30). The first is paid now and the rest once a year. The payments form a geometric series that adds up to J:
- First payment P₁ = J × g ÷ ((1 + g)ⁿ − 1), or J ÷ n when g = 0
- Payment k = P₁ × (1 + g)^(k − 1)
- Last payment = P₁ × (1 + g)^(n − 1)
Federal tax on each payment (tax year 2026). Each payment is taxed as your only income in its year. Taxable income = payment − standard deduction (0 if negative), then the brackets:
| Rate | Single: taxable income over | Married filing jointly: over |
|---|---|---|
| 10% | 0 | 0 |
| 12% | 12,400 | 24,800 |
| 22% | 50,400 | 100,800 |
| 24% | 105,700 | 211,400 |
| 32% | 201,775 | 403,550 |
| 35% | 256,225 | 512,450 |
| 37% | 640,600 | 768,700 |
The standard deduction is 16,100 for single filers and 32,200 for married couples filing jointly. The same 2026 table is used for every payment year.
State tax = payment × the state and local rate you enter.
Schedule. Each row is one year: year 1 is the payment made now, then one payment a year. The answer says paid once for 1 payment and paid in N yearly payments otherwise.
Outputs. After tax = payment − federal tax − state tax, summed over all payments for the annuity total. Withheld from the first payment = 24% of the first payment when it is over 5,000 (0 otherwise). With a cash option C, its federal tax is the same bracket calculation on C in one year, and cash after tax = C − federal tax − C × state rate.
Dataset and coverage
The brackets, standard deductions and the 24% withholding rate are for tax year 2026 (IRS, retrieved 2026-09-28). The dataset covers 2026-01-01 to 2026-12-31 and must be updated for 2027.
Assumptions
- No other income, deductions or credits. Other income raises the tax.
- Future years use the 2026 brackets; real brackets change each year with inflation and the law.
- A flat state and local rate.
- Estimates only, not tax advice.
Worked examples by hand
300,000 as 3 equal payments (g = 0), single, no state tax. Each payment is 300,000 ÷ 3 = 100,000. Taxable: 100,000 − 16,100 = 83,900. Tax: 12,400 × 10% = 1,240; (50,400 − 12,400) × 12% = 4,560; (83,900 − 50,400) × 22% = 7,370; total 13,170. Each payment nets 86,830; the three net 260,490, with 39,510 federal tax. Withheld from the first: 24% × 100,000 = 24,000.
100,000,000 over 30 payments at 5%, single. (1.05)³⁰ − 1 = 3.3219424, so P₁ = 100,000,000 × 0.05 ÷ 3.3219424 = 1,505,143.51 and the last is P₁ × 1.05²⁹ = 6,195,374.77. After federal tax the 30 payments come to 64,499,992.50.
A 45,000,000 cash option, married filing jointly, 5% state tax. Taxable: 45,000,000 − 32,200 = 44,967,800. Tax: 2,480 + 9,120 + 24,332 + 46,116 + 34,848 + 89,687.50 + (44,967,800 − 768,700) × 37% = 16,353,667 gives 16,560,250.50. State tax 2,250,000. Cash after tax: 26,189,749.50.
A note on gambling
These results are estimates, not tax, financial or gambling advice. A jackpot is very unlikely to be won. If gambling is causing problems for you or someone you know, the US National Problem Gambling Helpline is 1-800-MY-RESET (call or text).
Other questions people ask
How does the lottery annuity pay out?
Powerball and Mega Millions pay the annuity as 30 graduated payments over 29 years: one now, then one a year, each 5% larger than the one before. The advertised jackpot is the total of the 30 payments. For a 100 million jackpot the first payment is about 1.51 million and the last about 6.20 million.
How much tax is withheld from lottery winnings?
The lottery withholds 24% for federal income tax from winnings over 5,000 (IRS Instructions for Forms W-2G). For large prizes the tax due is higher, because most of each payment falls in the 37% bracket; you pay the difference when you file.
How is the federal tax estimated?
Each payment is treated as your only income that year. The calculator subtracts the 2026 standard deduction (16,100 single, 32,200 married filing jointly) and applies the 2026 brackets from 10% to 37%.
Is the annuity or the cash option better?
It depends on what you would do with the money, and this calculator does not say. The cash option is smaller and taxed in one year; the annuity pays more in total, spread over 29 years, and its later payments are worth less in today’s money.
Do states tax lottery winnings?
Most states with an income tax do, at their own rates, and a few cities add a local tax. Some states have no income tax or do not tax lottery winnings. Enter your combined state and local rate, or 0.