How Much Do Lottery Winners Pay In Taxes?

At least one winning ticket for Tuesday's record Mega Millions prize money of $1.6 billion was sold in South Carolina. In this photo, an advertisement for the Mega Millions lottery is seen in San Francisco, California, June 23, 2005.

Following the Tuesday night Mega Millions drawing, the life of someone in New York City changed when they hit the jackpot for $432 million. However, the winner will not take home that amount after they are done paying taxes.

The Tuesday night jackpot was worth $432 million with a cash option of $315 million. While the player has the option of choosing between receiving a lump sum of the grand prize or an annuity paid out over 30 years, many opt for the one-time payment.

If the winner from NYC chooses to receive their winnings through the lump sum, they would be going for the $315 million cash value. However, they may see less than $200 million by the time they are done paying around $115.6 million in federal, state, and city taxes.

From that $315 million grand prize, 24% or $75.6 million will be withheld to pay federal taxes. The winner will most likely owe more once tax season rolls around in April 2022.

Meanwhile, NY state is expected to take 8.82% of the winnings, which would be $27.8 million. New York City would also have to be paid 3.876% of the winnings or a total of $12.2 million. After everything is paid, the Mega Millions winner would receive about $199.4 million.

The winning lottery ticket was bought at Pronto Pizza on West 48th Street. The pizza shop is expected to get a $10,000 commission for selling the winning ticket.

The NYC player’s grand prize marks the first jackpot win since June 8. The lottery will now reset $20 million.

The odds of winning the Mega Millions jackpot were one in 302 million. Winners have one year to claim their grand prize.