Mega Millions $1.13B Winner Also Won Mega Tax Bill
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Posted on: March 27, 2024, 10:30h.
Last updated on: March 27, 2024, 11:10h.
The Mega Millions jackpot finally hit on Tuesday night. That’s after 30 drawings that didn’t see a single ticket match the five drawn white balls and the gold Mega Ball.
Someone in the Garden State became wildly wealthy overnight, as the winning ticket was sold in New Jersey. The $2 play was purchased at the ShopRite grocery and liquor store in Neptune, just west of Asbury Park.
The winning numbers were 7, 11, 22, 29, 38, and the Mega Ball was 4. The jackpot won was worth $1.13 billion.
The lucky winner will need to decide whether to take the one-time cash option of $537.5 million or the full value of the prize paid out through 29 annual payments that increase about 5% each year. Both prizes are before the effective federal tax rate of 37% levied on the country’s highest earners, which the IRS defines as anyone making more than $578,126 for single filers or $693,751 for married couples filing together.
Big Tax Bill
Eight states don’t tax lottery winnings — California, Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. The rest that allow lottery gambling do, and their tax rates range significantly from 2.5% in Arizona to as high as 10.9% in New York.
Unfortunately for the lucky Mega Millions winner, New Jersey isn’t far behind New York in demanding a large cut of lottery fortunes. The Garden State places an effective tax of 10.75% on lottery wins, which will greatly cut into Tuesday night’s massive windfall.
If the winner chooses the cash option, which historically has been the preferred payout method for Mega Millions and Powerball jackpot winners — though increased inflation that’s caused jackpots to balloon quicker has made the decision more complex — Tuesday night’s $537.5 million jackpot will be immediately reduced by about $198.8 million in federal taxes. The eight states that don’t further tax jackpots would leave the winner with a net fortune of approximately $338.66 million.
New Jersey’s 10.75% lottery tax will further reduce the payout by $57.7 million for a take-home pay of roughly $281 million. That’s still generational wealth, though giving nearly $58 million to Trenton is a big pill to swallow.
New Jersey hasn’t been an overly lucky place to play Mega Millions and Powerball. The $1.13 billion hit marks New Jersey’s first entry to the Mega Millions and Powerball top-25 jackpot list.
We might never know the identity of Tuesday night’s winner, as New Jersey allows lottery winners to remain anonymous. The ticket must be redeemed within one year.
Historic Win
Tuesday night’s $1.13 billion Mega Millions jackpot win was the eighth-largest lottery prize in the history of the United States.
Congratulations to the New Jersey Lottery for selling a jackpot-winning ticket in Tuesday’s $1.13 billion Mega Millions drawing,” said Georgia Lottery President and CEO Gretchen Corbin, lead director of the Mega Millions Consortium. “We celebrate our new jackpot winner, as well as all the prizes won and dollars raised for good causes during this exciting jackpot run.”
The Mega Millions Consortium said there were more than 29.9 million tickets during the 31 drawings that won some sort of prize, with most being the smallest prize of winning back the $2 wager. There were 56 tickets during the run that matched the five white balls, but not the gold Mega Ball, to win the second-tier prize of $1 million.
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