The Best and Worst States for Powerball Winners

By Chloe Whiteaker , Alex McIntyre, and Christopher Cannon

January 13, 2016

The estimated Powerball jackpot for today's drawing is $1.5 billion, if the winner agrees to receive it in yearly installments over 30 years. If you want your winnings in a lump sum, the payout is reduced to $930 million. But you won't get even that much. The IRS takes a hefty cut off the top of lottery winnings–and most states demand a chunk of their own.

Where this jackpot is worth the most

Most states tax lottery winnings like regular income; others don’t touch lottery windfalls.

That giant jackpot shrinks by about two-thirds

The IRS takes 25 percent off the top. The winner will then have to pay the federal government an additional 14.6 percent at tax time, for a total of 39.6 percent–the maximum individual tax rate. That means the most a winner can hope to take home is $561.7 million. Still not too shabby!

Where you'll owe the most in taxes

State income taxes for the highest bracket vary from 0 to 9.9%–excluding California and Pennsylvania, which exempt lotto winnings. Here's what states collect in the tax year, and the final payout a resident of that state could expect. Moving to another state to avoid taxes won't necessarily help.

Correction, Jan. 13: A previous version of this graphic incorrectly said that Wyoming does not participate in Powerball.

SOURCES: Multi-State Lottery Association, Internal Revenue Service, Tax Foundation

METHODOLOGY: Bloomberg analyzed tax amounts to be paid by a single winner of the January 13 Powerball jackpot across 50 states and the District of Columbia. Amounts are for the lump-sum cash option, currently projected to be $930 million.

Figures do not include calculations using marginal tax rates. The top income tax rate was used for the entire prize amount at both federal and state levels. Some states withhold more or less than is actually owed, which is reconciled when the winner files his or her taxes the following year. The final amount owed could change further based on deductions and other actions taken by the winner during the tax year.

Figures do not include municipal income taxes, which may apply for residents of certain cities.

State income tax rates are for 2015.

Lottery winners who buy a winning ticket in a state in which they do not reside can be partially or wholly taxed by a second state, depending on both states' tax reciprocity laws. Figures presented do not account for such circumstances. Residents of states that do not offer Powerball are eligible for prizes on tickets bought in other states.

California and Pennsylvania have top income tax rates of 13.3% and 3.07%, respectively, but do not tax lottery winnings.

Powerball is played in 44 states, District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Tax information was not available for Puerto Rico or the U.S. Virgin Islands.