If you win the Powerball and take the lump sum payment, right away, nearly a quarter of it is withheld for federal taxes. And you're not off the hook yet.
When a grand prize winner comes forward, they must first decide whether they want to receive their, or receive their winnings in a lump sum of cash. If they pick the annuity, they will eventually receive the entire advertised jackpot over the span of three decades.
Most jackpot winners go with the lump sum, which means they get the “cash value” of that jackpot. For Saturday's Powerball jackpot,Right away, 24% of that cash value is withheld for federal taxes and goes to the IRS,So in the scenario where just one person wins the Powerball and selects that cash option, around $105.93 million of Saturday's estimated prize would be withheld, dropping it to $335.46 million.
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