Here’s What You’d Actually Walk Away With if You Won the $1.8 Billion Powerball
The Powerball jackpot has climbed to a staggering $1.8 billion. Even if you don’t play the lottery, that figure likely has you running “what if” scenarios in your head. On the surface, it looks like life-changing money—and it is. But there’s a catch that the billboard ads flashing the jackpot total won’t advertise.
Between payout options and layers of taxes, the advertised number isn’t what you actually take home. The final figure in your account depends on the choices you make and, in some cases, the state you live in.
Lump Sum or Annuity
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The Powerball doesn’t hand over one giant check with every zero written out. Winners pick between two options: an annuity spread across 30 years or a lump sum upfront worth about 45% of the advertised prize.
According to Powerball’s official figures as of September 5, 2025, the lump sum for this jackpot was roughly $826.4 million. The annuity option would have been the full $1.8 billion, paid as one initial installment followed by 29 annual payments that increase by 5% each year.
Most winners choose the lump sum, even though it’s smaller, because patience isn’t exactly human nature when over half a billion dollars is at stake. But either choice pushes you straight into the top federal income bracket. From there, the math starts to sting.
The Federal Tax Hit
Here’s the part nobody likes: the IRS takes a 24% withholding off the top of any lottery prize above $5,000. This would result in an instant cut of around $198.3 million if you went lump sum and drop your check closer to $628 million.
Plus, by the time you file taxes the following April, the rest of the bill comes due because winnings of this size land in the 37% federal bracket. That means coughing up another massive chunk to settle up.
If you took the annuity instead, each yearly payment would also face the 24% upfront withholding, with more owed later once your complete tax return is filed. Either way, Uncle Sam makes sure your windfall is firmly in the taxable zone.
State Taxes Change Everything
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Where you buy your ticket and where you live matter a lot. States like California, Florida, Texas, Washington, and Wyoming don’t tax lottery winnings. In those places, your only bill would be federal. But if you’re in New York, the state takes 10.9% on top of federal obligations.
In that scenario, a New Yorker would see their take-home amount shrink to about $430.6 million after all taxes. Meanwhile, that same winner could have walked away with more than $520 million in a state like Florida. The difference is nearly $90 million, depending purely on geography.
It’s not just about where you live, either. If you’re a California resident but buy your ticket in Rhode Island, you’ll need to file both a California and a Rhode Island tax return, though you’d typically claim credits to avoid being taxed twice on the same winnings. These multi-state quirks are why tax professionals become lottery winners’ closest friends. In reality, the story for the winners of the September 6 drawing was more complicated.
The Reality for the $1.8 Billion Jackpot
When the September 6, 2025, drawing finally ended a streak of 41 rollovers, the jackpot was split between two winners, one in Missouri and one in Texas. Each could take $893.5 million as an annuity or about $410.3 million as a lump sum before taxes. Missouri levies a state tax of 4%, while Texas charges nothing on lottery winnings. That gap could mean a difference of tens of millions of dollars between the two winners’ final take-home amounts.
To put it into perspective, the highest payout in Powerball history remains the $2.04 billion jackpot won in California in November 2022, where state law spared the winner from extra income tax on top of federal obligations.