After Paying Taxes, What’s Left of the Powerball Jackpot in Texas?

As the Powerball jackpot grows to record levels, more and more Texans are buying tickets hoping to strike it rich.

Leading up to Wednesday night’s drawing, the Texas Lottery said Powerball sales were about $33,000 per minute through 9 p.m. and that more than $28 million in tickets were sold on Nov. 2 before ticket sales were halted at 9 p.m., the normal stopping time on the night of a drawing.

With no jackpot winner Wednesday night, the $1.2 billion Powerball jackpot rolled over to Saturday and is now estimated to be worth a staggering $1.6 billion (for those who choose to take their riches through an annuity) — which makes it the largest lottery prize of all time.

For those who take the cash value option, which is most lottery players, they’ll take home an estimated $782.4 million. They’ll owe taxes on that, of course, which is a hefty, hefty part of the prize.

According to the Texas Lottery, in Texas the only taxes due on lottery winnings of more than $5,000 are federal taxes — there is no state tax on lottery winnings. So, should a ticket bought in Texas win the jackpot the winner will only have to pay the federal government their 24% cut.

But, as an astute NBC DFW reader pointed out, the winnings are taxed as income and a jackpot of that size will firmly push the winner into the top tax bracket where you’d owe 37%.

That sounds like a lot, and it is, but if you win you’ll still get to keep 63% and that’s not too bad on any jackpot.

Some quick math shows if a Texas player wins the $1.6 billion Powerball jackpot on Saturday and took the cash value option they’d ultimately walk away with about $492,912,000 after paying $289,488,000 to the federal government.

That’s a big check to write, but one we suspect most anyone would probably be happy to do considering what they’d get to keep. Of course, should you win you’d want to consult with a legal or financial tax expert to determine your final tax liability.

For those playing the other two big jackpot games, Mega Millions and the Texas Lottery, the winnings after taxes are listed below for upcoming drawings.

WHAT’S LEFT AFTER WINNING THE LOTTERY IN TEXAS?

  • Mega Millions – $119M Friday, $59.1M cash value — $37.2M after taxes.
  • Powerball – $1.6B Saturday, $782.4M cash value — $492.9M after taxes.
  • Texas Lottery — $11.5M Saturday, $6.63M cash value — $4.2M after taxes.

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