World: Mega Millions jackpot: How much will winner owe in taxes?

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The billion-dollar Mega Millions jackpot has finally been claimed in Illinois after being purchased at a Speedway gas station in Des Plaines.

But how much of that will end up in the winner's pocket, and how much will be owed in taxes?

The tax bill depends on whether the Mega Millions winner chooses a cash payout of $780.5 million or annual payments totaling $1.3 billion over 29 years.

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Illinois currently withholds 24% in federal taxes, and 4.95% in state income taxes, though that may not be the total tax obligation, depending on the winner's financial situation.

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  Mega Millions: What to know ahead of Friday's drawing The Mega Millions lottery jackpot has surpassed the $1 billion mark. The record jackpot is $1.537 billion, which was won in South Carolina in October of 2018.It is the third time in the 20-year history of Mega Millions that the jackpot has surpassed that mark.

If the winner decides to take the $780.5 million lump sum, approximately $187.3 million in federal taxes would be withheld, in addition to $38.6 million in state taxes. That would mean an estimated take-home payout of $554.6 million.

If the winner takes the full $1.337 billion in annual installments and tax rates don't change over the next 29 years, an estimated $320.9 million in federal taxes would be withheld, and an estimated $66.2 in state taxes would be withheld. That would mean an estimated take-home payout of $949.9 million over 29 years.

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A man holds Mega Millions lottery tickets on July 29, 2022, in New York City. John Smith/VIEWpress © John Smith/VIEWpress A man holds Mega Millions lottery tickets on July 29, 2022, in New York City. John Smith/VIEWpress

Though the cash option is more popular, the annuity payments are each 5% bigger than the last one.

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  Mega Millions $1.02 billion jackpot: Should you take a lump sum or annual payouts? The jackpot swelled from $20 million to the $1 billion prize after 29 consecutive weeks of no winners for the prize, with the previous draw hitting $830 million.The Mega Millions Jackpot swelled to $1.02 billion after no one claimed the $830 million draw on Tuesday. The jackpot has grown from a meager $20 million in April, going 29 consecutive draws without a winner.

"This helps protect winners’ lifestyle and purchasing power in periods of inflation," the Mega Millions lottery states on its website.

This Mega Millions jackpot is one of the biggest ever after the 2018 South Carolina winner who claimed a $1.537 billion pot.

"Congratulations to the Illinois Lottery for selling the winning ticket for the $1.337 billion Mega Millions jackpot," Ohio Lottery Director Pat McDonald said in a statement. "We are thrilled to have witnessed one of the biggest jackpot wins in Mega Millions history. We’re eager to find out who won and look forward to congratulating the winner soon! Better still, this exciting jackpot run has had a significant positive impact on the revenues for good causes raised by our member lotteries."

Mega Millions $1.3B winner's identity still a mystery .
Mega Millions winners in Illinois are allowed to remain anonymous, and no one has yet come forward to say that they bought the winning ticket.Mega Millions allows winners to remain anonymous if they so choose — most often to afford negative attention or unwanted solicitations for money. However, the winning ticket for last week's historic jackpot has not been claimed at all.

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