Advertiser Disclosure

Powerball Jackpot: Best and Worst States for Winners

October 6, 2023

4 min Read

Written by Yaël Bizouati-Kennedy

Edited by Chris Cluff

Commitment to Our Readers

GOBankingRates' editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services - our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines and our products and services review methodology.

20 YearsHelping You Live Richer

Reviewed by Experts

Trusted by Millions of Readers

The Powerball lottery set a record in November 2022, with a drawing worth $2.04 billion. It got over a third of the way there in February before a player in Washington state won the $754.6 million jackpot. It was the sixth-highest Powerball amount ever.

On July 19, the Powerball hit $1 billion — the third-largest total ever.

While $1 billion is a nice chunk of change, what ends up in the bank account can significantly change depending on where the lucky winner resides.

Indeed, while in some countries lottery winnings are not taxed, in the U.S. they are — and it varies state by state.

According to the Powerball website, a jackpot winner may choose to receive the prize as an annuity, paid in 30 graduated payments over 29 years, or as a lump sum payment. But both prize options are prior to federal and jurisdictional taxes.

First off, all winnings over $5,000 are subject to tax withholding by lottery agencies at the rate of 24%, according to TurboTax. And, if you opt to take the winnings in a lump sum, you will be in the highest tax bracket, which is 37%.

On top of that, there are state taxes, which vary wildly. Let’s take a look at the best and worst states to win the jackpot.

Best States To Win Powerball

There are eight states that do not tax Powerball winnings: California, Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming. Pennsylvania, North Dakota, Indiana and Ohio also make our list of best states.

1. California, Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming

If you’re lucky enough to have bought your winning ticket in one of these states, you won’t pay any taxes at the state level.

2. North Dakota

State tax: 2.9%

ANNUITY

Subtotal after federal taxes: $631,111,350
State taxes: $966,667
Annual payments: $20,070,378
Total net payout: $602,111,340

CASH

Subtotal after federal taxes: $325,621,045
State taxes: $14,987,200
Total net payout: $310,633,845

Today’s Top Offers

3. Pennsylvania

State tax: 3.07%

ANNUITY

Subtotal after federal taxes: $21,037,045
State taxes: $1,023,333
Annual payments: $20,013,712
Total net payout: $600,411,360

CASH

Subtotal after federal taxes: $325,621,045
State taxes: $15,865,760
Total net payout: $309,755,285

4. Indiana

State tax: 3.15%

ANNUITY

Subtotal after federal taxes: $21,037,045
State taxes: $1,050,000
Annual payments: $19,987,045
Total net payout: $599,611,350

CASH

Subtotal after federal taxes: $325,621,045
State taxes: $16,279,200
Total net payout: $309,341,845

5. Ohio

State tax: 3.99%

ANNUITY

Subtotal after federal taxes: $21,037,045
State taxes: $1,330,000
Annual payments: $19,707,045
Total net payout: $591,211,350

CASH

Subtotal after federal taxes: $325,621,045
State taxes: $20,620,320
Total net payout: $305,000,725

Worst States To Win Powerball

The five worst states for lottery taxation are New York, New Jersey, Oregon, Minnesota and Maryland. Washington, D.C., also is included in this bottom five.