A lot of people who play or at least hear about the Mega Millions jackpots are surprised to discover that the announced prize is never what gets to the bank account of winners. Aside from taxes, the payout changes according to how the winner decides to get paid. On the other hand, our Mega Millions payout and tax calculator can let you figure out the numbers with precision.
MegaMillions Payout & Tax Calculator
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Why Is the Mega Millions Payout Different From the Jackpot?
First of all, the announced jackpot is before taxes. If even the earnings from our hard work have to be shared with the government, it is no surprise that a life-changing lottery prize has to be as well. That already includes the federal and possible state taxes on lotteries, which is enough to reduce our prize a lot.
However, the major reduction that is completely obscure to those who do not read the rules is the fact that the announced jackpot is not the actual prize. Well, at least not if you prefer to claim it all at once.
The at-once option is called “lump-sum payment” or “cash option”. Usually, people prefer the lump sum over annuities because they want the money immediately, but that comes with a cost. The total jackpot is reduced by about 40%, or else you will divide the total prize after taxes in one first payment and 29 other equal annual shares.
Mega Millions Payout and Taxes Calculator Explained
There are three important fields that require your attention in order to make this Mega Millions payout and taxes calculator work:
- Prize Amount: The total announced jackpot, regardless of the option that you will pick.
- State: The state where you will play it.
- Payout Method: Annuity or lump-sum payment, simple as that.
When you fill in those fields and calculate, the system will automatically determine the following:
- Estimated Gross Payout: The amount that you wished so strongly for when you were playing the lottery. It already considers the lump-sum payment deduction.
- Estimated Total Taxes Withheld: The amount that is deducted in the form of taxes.
- Estimated Net Payout: The estimated amount that you would be paid after taxes.
Under the Mega Millions payout and taxes calculator, you will find tables for both options with the values and deductions in the correct order. Except of Mega Millions you can calculate taxes for any lottery.
Mega Millions Payout and Tax for Foreign Players
In the case that you are a foreigner who has purchased a Mega Millions ticket locally, you will have almost the same treatment. The federal tax for foreigners in the United States is 30% instead of 24%, which will decrease your payment a bit more.
If you are playing Mega Millions through online lottery sites, you will be playing as a foreigner. In that case, lottery agents will require you to claim your Mega Millions jackpot in person, and the same rules above apply to you – which means 30% in federal taxes plus everything else and your taxes on lottery winnings and income at home.
Now, if you play online through lottery betting sites, they will mimic the tax and prize deductions of Mega Millions, even though they would not need to. In other words, you may try, but you will not avoid lottery taxes playing Mega Millions as a foreigner.