Mega Millions jackpot hits $830M. Here’s how much taxes you’d pay. - NJ.com

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The Mega Millions $830 million jackpot for Tuesday’s big lottery drawing is massive, but so is the potential tax bill if someone hits all the winning numbers.

So how much money could a Mega Millions ticket that overcomes the long odds actually take home?

Nearly all lottery winners over the years have opted for the cash option and receive the money in one lump sum rather than the annuity, which is always the advertised jackpot.

The cash option for Tuesday’s Mega Millions drawing is $487.9 million.

For the cash option, the winner would first have 24% — or $117,086,000 — in federal taxes chopped off the prize amount.

That’s before state taxes that vary. A potential winner who buys a ticket in New Jersey would then pay an additional 8% — or $39,032,000 — in state taxes leaving the lucky winner with $331,782,000, state lottery officials said Tuesday.

Should a ticket holder from New Jersey opt for the annuity and hit the jackpot, he or she would pay $199,200,000 in federal taxes and another $66,400,000 in state taxes for a prize of $564,400,000.

Someone who wins the jackpot and chooses the annuity receives one immediate payment and then 29 annual payments, each of which are 5% more than previous year, according to Mega Millions officials.

It’s also worth noting that if tax rates increase during the term of the annuity, then taxes are withheld at the rate that is in place at the time of the scheduled payment.

Player select the cash or annuity option when purchasing tickets. The annuity option can be changed to cash when claiming a prize, but a cash option cannot be switched to annuity, a New Jersey Lottery spokeswoman said.

Tuesday’s jackpot is the third-largest in the 20 years Mega Millions has been played and the fourth-largest in U.S. lottery history. The three largest jackpots are more than $1 billion.

The drawing will be held at 10:59 p.m. and be televised on WABC-7 in New York City and Fox 29 in Philadelphia.

No one has hit the Mega Millions jackpot since someone in Tennessee won a $20 million prize on April 15.

The odds of a $2 ticket matching all the winning numbers (five numbers plus the Mega Ball() are 302,575,350 to 1. Players have a 1 in 12,607,306 chance of a ticket matching five numbers, but not the Mega Ball and winning at least $1 million.

Mega Millions drawings are held on Tuesday and Friday in 45 states, along with Washington, D.C., and the U.S. Virgin Islands.

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Jeff Goldman may be reached at jeff_goldman@njadvancemedia.com.

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