Free Mega Millions payout calculator. Compare lump sum vs annuity, calculate taxes by state, and see your actual take-home lottery winnings.
The Mega Millions Payout Calculator shows exactly how much of a lottery jackpot you actually take home after federal and state taxes. Compare the lump sum cash option versus the 30-year annuity, factor in your state's tax rate, and see the real numbers — not what the headline says.
Lottery jackpot numbers are always advertised as the annuity total — but 80%+ of winners choose the lump sum, which is roughly 60% of the advertised amount. After 37% federal tax and state taxes up to 13.3%, winners in high-tax states keep barely half of the already-reduced lump sum. A $500 million jackpot may net just $175 million in California.
This calculator shows the full picture: gross payout, federal tax, state tax, effective tax rate, and the net amount you would deposit. The annuity schedule shows how 30 escalating annual payments grow with a 5% annual increase, and the lump sum comparison helps you understand the real trade-offs between immediate cash and guaranteed lifetime income.
Headlines show the jackpot — not what you keep. This calculator reveals the real after-tax payout for both lump sum and annuity options, helping you understand lottery economics. Even if you never win, understanding how taxes reduce winnings changes perspective on expected value. Keep these notes focused on your operational context.
Lump Sum = Jackpot × 60% Federal Tax = Payout × 37% State Tax = Payout × State Rate Net Payout = Payout − Federal Tax − State Tax Annuity Payment(year) = Base × 1.05^(year−1)
Result: Net payout $174M
Lump sum: $300M (60%). Federal tax: $111M (37%). State tax: $15M (5%). Net: $174M — only 34.8% of the $500M headline.
The lump sum gives immediate control over your money. Invested conservatively at 5-7%, self-managed returns can exceed the 30-year annuity total. However, 70% of lottery winners go broke within a few years due to poor financial management. The annuity acts as forced discipline — you cannot blow through 30 years of payments in one year.
State lottery taxes range from 0% (California, Florida, Texas) to 13.3% (California income tax — which doesn't apply to lottery). New York City winners face the highest combined rate: 37% federal + 10.9% state + 3.876% city = 51.8% — over half their winnings go to taxes.
With 1-in-302.6 million odds and $2 tickets, the expected value is negative at virtually every jackpot level. Even a $1 billion jackpot has an expected value under $2 per ticket when accounting for taxes, multiple winners, and the annuity discount. Lottery tickets are entertainment, not investments.
The lump sum (cash option) is approximately 60% of the advertised jackpot. A $500M jackpot has roughly a $300M cash value. The exact ratio varies based on interest rates.
The IRS taxes lottery winnings at the top marginal rate of 37% for amounts over approximately $609,350 (2024). An initial 24% is withheld at payout; you owe the remaining 13% at tax time.
California does not tax lottery winnings. Florida, Texas, Tennessee, South Dakota, Wyoming, Washington, and New Hampshire have no state income tax. However, federal tax still applies.
Lump sum gives immediate access to invest, but requires discipline. Annuity provides guaranteed income for 30 years with 5% annual increases. Financial advisors often favor lump sum for disciplined investors.
Each member receives their proportional share and pays taxes on their portion. A signed group agreement before purchase is critical for legal documentation.
You pay tax in your state of residence. Some states tax nonresidents if the ticket was purchased there. You may get credits to avoid double taxation.