The billion-dollar jackpot has now finally been claimed by Friday’s Mega Millions winner in Illinois. The winning ticket was purchased at a Speedway gas station located in De Plaines. And, with a jackpot sitting at over $1 billion – one of the largest in lottery history – we can’t help but wonder: how much is the winner going to owe in taxes for the $1.28 billion jackpot?
The Mega Millions Tax Total Depends On A Few Variables
When determining how much this Mega Millions player is set to pay in taxes, it’s important to know how they will be accepting the prize money. The player has the option of choosing a cash payout of $780.5 million. The Mega Millions winner also has the option to choose a payment option. These annual payments will total about $1.3 billion a year, over 29 years. However, looking at sheer overall numbers, we know the tax rate in Illinois lands at 24 percent for federal taxes. The state income tax rate falls at 4.95 percent.
Each Mega Million Payout Option Brings With It Different Tax Totals
The lucky lottery winner chooses the $780.5 million lump sum amount they get the cash right away. However, they will be paying around $187.3 million in federal taxes, per the New York Post. Additionally, the state taxes would land at around $38.6 million. This comes to a grand total of around $554.6 million of the lottery winnings going towards taxes.
However, this Mega Millions winner could choose to take the full amount in annual installments. And, tax rates don’t change over these 29 years, the winner would be looking at a far larger payout. In total, they would pay a federal tax amount of around $320.9 million. Additionally, around $66.2 million in state taxes would be withheld. So, with this option, the lottery player would end up taking home about $949.9 million over 29 years.
The cash option is the most common one people choose with big winnings like these. However, the annual payment option gives the lottery player a bigger payout overall. It’s an option that the Mega Millions lottery website says helps to “protect winners’ lifestyle and purchasing power in periods of inflation.”
This Jackpot Is The Largest One Since 2018
This Mega Millions jackpot is the biggest lottery payout amount since 2018 when one South Carolina lottery player claimed a $1.537 billion pot. It may not be the largest, but this recent win is certainly a historical one!
“Congratulations to the Illinois Lottery for selling the winning ticket for the $1.337 billion Mega Millions jackpot,” notes one Lottery Director in a recent statement.
“We are thrilled to have witnessed one of the biggest jackpot wins in Mega Millions history,” the statement continues.
“We’re eager to find out who won and look forward to congratulating the winner soon!” the Lottery Director adds. “Better still, this exciting jackpot run has had a significant positive impact on the revenues for good causes raised by our member lotteries.”