The $1 billion Mega Millions jackpot has finally been claimed in Illinois after it was claimed at a Speedway gas station in Des Plaines.
But how much of that will end up in the winner’s pocket and how much will be owed in taxes?
The tax bill depends on whether the Mega Millions winner chooses a cash payout of $780.5 million or annual payments totaling $1.3 billion over 29 years.
Illinois currently withholds 24% in federal taxes and 4.95% in state income taxes, although this may not be the full tax liability, depending on the winner’s financial situation.
If the winner chooses to take the $780.5 million lump sum, approximately $187.3 million in federal taxes would be withheld, plus $38.6 million in state taxes. That would mean an estimated take home of $554.6 million.
If the winner takes the full $1.337 billion in annual installments and tax rates remain unchanged for the next 29 years, about $320.9 million would be withheld in federal taxes and $66.2 would be withheld in state taxes. That would mean an estimated take-home pay of $949.9 million over 29 years.
After taxes, the winning Mega Millions ticket holder will receive a cash payment or annual payments totaling over the next 29 years. Corbis via Getty Images
Although the cash option is more popular, the annual payments are each 5 percent higher than the previous one.
“This helps protect the lifestyle and purchasing power of winners in periods of inflation,” the Mega Millions lottery says on its website.
This Mega Millions jackpot is one of the biggest ever after the 2018 South Carolina winner claimed a $1.537 million jackpot.
“Congratulations to the Illinois Lottery for selling the winning $1.337 million Mega Millions jackpot ticket,” Ohio Lottery Director Pat McDonald said in a statement. “We’re thrilled to have witnessed one of the biggest jackpot wins in Mega Millions history. We can’t wait to hear who won and look forward to congratulating the winner soon! Even better, this exciting jackpot race has had a significant positive impact on good cause revenue raised by our members’ lotteries.”