What Percentage of Lottery Winnings Would be Withheld in Your State?

With the Powerball Jackpot at $118 million, Americans in 43 states and D.C. are lining up for tickets. While one or more persons will get the winning numbers sooner or later, every state that allows ticket sales also wins big. After all, the coffers of the 44 participating jurisdictions get a slice of every jackpot, as only about half of Powerball ticket revenue is given out in the form of prizes (lower than the average for other lottery games). The rest of the jackpot, minus the consortium’s administrative costs, goes toward those jurisdictions. While your ticket purchase might be a long shot, the government cut of the winnings is guaranteed. And in all likelihood, at least one state is going to win big twice. That’s because lottery winnings are generally taxed as ordinary income at the federal and state levels (and, where applicable, locally). In fact, most states (and the federal government) automatically withhold taxes on lottery winnings over…

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