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Powerball Jackpot: Best and Worst States for Winners

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CatLane / Getty Images

The Powerball lottery set a record in November 2022, with a drawing worth $2.04 billion. Now it is climbing again.

The drawing for Feb. 4 is worth $700 million — tying for sixth highest among Powerball’s largest jackpots.

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While $700 million 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 Powerball jackpot.

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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.

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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.

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2. North Dakota

State tax: 2.9%

ANNUITY

  • Subtotal after federal taxes: $14,737,045
  • State taxes: $676,667
  • Annual payments: $14,060,378
  • Total net payout: $421,811,340

CASH

  • Subtotal after federal taxes: $236,728,045
  • State taxes: $10,895,300
  • Total net payout: $225,832,745

3. Pennsylvania

State tax: 3.07%

ANNUITY

  • Subtotal after federal taxes: $14,737,045
  • State taxes: $716,333
  • Annual payments: $14,020,712
  • Total net payout: $420,621,360

CASH

  • Subtotal after federal taxes: $236,728,045
  • State taxes: $11,533,990
  • Total net payout: $225,194,055
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4. Indiana

State tax: 3.15%

ANNUITY

  • Subtotal after federal taxes: $14,737,045
  • State taxes: $735,000
  • Annual payments: $14,002,045
  • Total net payout: $420,061,350

CASH

  • Subtotal after federal taxes: $236,728,045
  • State taxes: $11,834,550
  • Total net payout: $224,893,495

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5. Ohio

State tax: 3.99%

ANNUITY

  • Subtotal after federal taxes: $14,737,045
  • State taxes: $931,000
  • Annual payments: $13,806,045
  • Total net payout: $414,181,350

CASH

  • Subtotal after federal taxes: $236,728,045
  • State taxes: $14,990,430
  • Total net payout: $221,737,615
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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.

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5. Maryland

State tax: 8.95%

ANNUITY

  • Subtotal after federal taxes: $14,737,045
  • State taxes: $2,088,333
  • Annual payments: $12,648,712
  • Total net payout: $379,461,360

CASH

  • Subtotal after federal taxes: $236,728,045
  • State taxes: $33,625,150
  • Total net payout: $203,102,895
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4. Minnesota

State tax: 9.85%

ANNUITY

  • Subtotal after federal taxes: $14,737,045
  • State taxes: $2,298,334
  • Annual payments: $12,438,712
  • Total net payout: $373,161,360

CASH

  • Subtotal after federal taxes: $236,728,045
  • State taxes: $37,006,450
  • Total net payout: $199,721,595
GarysFRP / iStock.com

3. Oregon

State tax: 9.9%

ANNUITY

  • Subtotal after federal taxes: $14,737,045
  • State taxes: $2,310,000
  • Annual payments: $12,427,045
  • Total net payout: $372,811,350

CASH

  • Subtotal after federal taxes: $236,728,045
  • State taxes: $37,194,300
  • Total net payout: $199,533,745
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2. New Jersey and Washington, D.C.

State/District tax: 10.75%

ANNUITY

  • Subtotal after federal taxes: $14,737,045
  • State taxes: $2,508,334
  • Annual payments: $12,228,712
  • Total net payout: $366,861,360

CASH

  • Subtotal after federal taxes: $236,728,045
  • State taxes: $40,387,750
  • Total net payout: $196,340,295

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1. New York

State tax: 10.9%

ANNUITY

  • Subtotal after federal taxes: $14,737,045
  • State taxes: $2,543,333
  • Annual payments: $12,193,712
  • Total net payout: $365,811,360

CASH

  • Subtotal after federal taxes: $236,728,045
  • State taxes: $40,951,300
  • Total net payout: $195,776,745

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