Lottery Lump Sum vs. Annuity Calculator by State

The number on the billboard is not the prize. It is the total of 30 payments spread over 29 years. Take the money now and you get the cash option instead, which is under half of the headline whenever long-term interest rates are above about 4.3%. Then the IRS takes up to 37%, most states take their share, and New York City, Yonkers, Portland, Philadelphia and some other cities take theirs. This calculator runs both choices through the 2026 tax rules for wherever you live, and shows the interest rate you would need to earn for the lump sum to come out ahead.

01The Calculator

Estimates for a resident who bought the ticket in their home state, using 2026 federal and state rates for every year of the annuity and the standard deduction. Not tax advice: a winner's real bill depends on their full return, deductions and where they live when each payment arrives.

02Year by Year

The annuity starts small and grows 5% a year, so it takes years to catch up with a lump sum that was invested from day one. Both options are invested at the after-tax return you set above. The orange line is the invested lump sum; the blue line is the balance from investing each annuity payment when it arrives. With spending set to zero, nothing is withdrawn. Add a yearly spending amount above to see how long each option lasts, or whether the early annuity payments can cover it. Spending only comes out of money that is there: a shortfall is not borrowed or carried forward, and the caption shows how much of the planned spending each option actually pays for. Where the lines cross is the year the annuity pulls ahead, if it ever does.

03The Same Jackpot in Every State

The lump sum after tax for the jackpot in the calculator, in every state that sells Powerball and Mega Millions, before any city tax. Tap a state to load it into the calculator.

04What the Record Winners Took Home

The ten largest US jackpots, every one of them taken as cash. The take-home figures are estimates at 2026 federal and state rates for a single filer in the state where the ticket was sold; tax rates at the time of each win differed slightly, and winners in states with city taxes may have paid more.

Jackpots and cash values: Powerball, Mega Millions and state lottery announcements. The August 2023 Florida winner, Saltines Holdings LLC, took the $794,248,882 cash option (Mega Millions announcement, December 27, 2023). Split jackpots show the take-home per ticket.

05Why the Cash Option Moves

The lottery does not hold the advertised jackpot. It holds the cash, and promises the annuity by buying long-term government bonds with it. When interest rates are high, the same pile of cash buys a much bigger stream of payments, so the advertised number grows and the cash option shrinks as a share of it. In January 2016, with long-term rates under 3%, the cash was 62% of the headline; in late 2026, with the 30-year Treasury above 5%, it was about 43%. It also means the cash option is roughly the present value of the 30 payments at long-term Treasury yields. So the lump sum only comes out ahead if you can earn more than about that rate, after tax, on the money you keep.

The line is the cash share implied by the 30-payment, 5%-a-year schedule at each interest rate; the dots are actual draws, from the lotteries' published figures. It is an approximation: the lottery prices the payments off the whole yield curve, not a single rate.

06How Each State Taxes a Jackpot

Top state income tax rate as it applies to a multimillion-dollar prize in 2026, and what the state lottery withholds when you claim, where we could confirm it. Withholding is a down payment, not the final bill: several states withhold less than they finally charge, so the rest is due at tax time.

Not shown: Alabama, Alaska, Hawaii, Nevada and Utah, which have no lottery, and the territories. Rates from state revenue departments and the Tax Foundation's 2026 table, updated for the Arkansas, Georgia, South Carolina and West Virginia cuts passed in 2026. Withholding from state lottery and revenue sites.

07What the Estimate Leaves Out

• Buying in another state. The state where the ticket was sold usually taxes the prize too, and your home state gives a credit for that tax, up to its own rate. Residents of states without an income tax get no credit. California exempts only California Lottery prizes; a Californian who wins on a ticket bought in another state owes California tax.
• Future tax rates. Every annuity payment is taxed at 2026 rates here. Tax brackets rise with inflation and laws change, and a move to another state changes the state tax on the payments still to come.
• The rest of your return. The calculator uses the standard deduction. Big gifts, charitable donations and other income change the bill. From 2026 only 90% of gambling losses are deductible, and only against gambling winnings (the rule as of November 2026; Congress is considering restoring 100%). It barely matters on a jackpot.
• Death and estate tax. If an annuity winner dies, the remaining payments go to the estate, and their value counts for estate tax. Some lotteries can pay the rest in one sum; see our estate tax calculator.
• Selling the payments. Many states let winners sell future payments with court approval, but buyers pay well under their value.
• Risk. The comparison assumes a steady return every year and unchanged tax rules. A higher modeled value for the lump sum does not make a riskier investment better than guaranteed payments.
• Paying the tax. The tax not covered by withholding is not always safe to leave until April: the IRS can expect estimated tax payments during the year on large gambling winnings.

08Sources and Method

• Federal brackets, standard deduction and 24% withholding: IRS Rev. Proc. 2025-32 (2026 figures) and IRS Topic 419, gambling income and losses. Net Investment Income Tax: IRS.
• Payout schedule: Powerball and Mega Millions, 30 payments over 29 years. The calculator uses the 5% yearly increase both games apply, so the first payment is the advertised jackpot divided by 66.44.
• State rates: Tax Foundation, State Income Tax Rates and Brackets, 2026, checked against state revenue departments, including Massachusetts, Portland and Multnomah County and Philadelphia.
• Interest rate: US Treasury daily yield curve, 30-year rate of 5.31% on October 30, 2026.
• Method: each payment is taxed as extra income on top of your other income, at 2026 brackets, in the year it arrives. The break-even is the after-tax return at which the present value of the annuity, after tax, equals the lump sum after tax. Rules checked November 1, 2026.