After weeks without a winner, the Mega Millions jackpot has reached a staggering $977 million, making it the sixth largest in the game’s 22-year history. However, the amount you would take home varies significantly based on the state where the ticket was purchased, due to state taxes.

While federal taxes remain consistent for all winners at 24% upfront, the total tax bill is expected to reach 37% when filing, considering the likelihood of being in the highest tax bracket. On the other hand, state taxes on lottery winnings differ widely across the U.S., typically ranging from 3% to 6%. Notably, New York imposes the highest tax rate at 10.9% among participating states.

Interestingly, there are eight states that do not impose taxes on lottery winnings at all, offering the highest possible payouts to winners. These states include California, Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. For residents in these states, the cash lump sum payout would amount to $294,251,812 or a 30-year annuity totaling $616,764,360.

It’s worth noting that the location of ticket purchase also plays a significant role, as buying a winning ticket outside of one’s home state could trigger taxes in the state of purchase. While home states typically require reporting out-of-state winnings, they often provide a credit or deduction for taxes already paid to a non-resident state.

For instance, if a California resident buys a winning ticket in Oregon, where the state tax on jackpot winnings is 8%, the take-home amount would be approximately $46 million less than if the ticket was purchased in California, which does not impose state taxes on jackpots.

For potential jackpot winners, seeking assistance from a tax professional is advisable to navigate the tax implications, determine the best payout option, and address potential out-of-state tax obligations.

The next Mega Millions drawing is scheduled for Friday, March 22 at 11 p.m. ET.

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