Major Powerball Ticket Wins Monumental $473.1 Million Jackpot, Lists Among Top 20 Biggest Lottery Victories Ever Recorded
California Offers Lottery Winners a Tax-Free Win, While Arizona Residents Face State Taxes
In a recent Powerball draw, a lucky winner from Arizona took home the $473.1 million jackpot. However, the win comes with a catch for residents of the state, as they are required to pay a 2.5% state tax on their winnings. This contrasts with states like California, which does not impose a state tax on lottery winnings.
The Powerball jackpot, before federal and state taxes, stood at an estimated $473.1 million. If the winner chooses the one-time lump cash sum, federal taxes will reduce the payment to approximately $178.5 million. In Arizona, state tax on lottery winnings for residents is 2.5% of the prize amount. Non-residents who win Arizona lottery prizes are typically subject to the same 2.5% Arizona state tax withholding on their winnings if the prize is from an Arizona lottery ticket purchase.
In comparison, some states do not tax lottery winnings at all, allowing winners to keep more of their winnings after state taxes. For example, California does not impose a state tax on lottery winnings.
Key details include:
| State | Lottery Winnings State Tax for Residents | Non-Resident Tax on AZ Lottery Winnings | Notes | |---------------|------------------------------------------|---------------------------------------|------------------------------| | Arizona | 2.5% | 2.5% (if won from AZ lottery ticket) | Withheld upfront on winnings | | California | 0% | N/A | No state tax on lottery winnings | | Other states* | Varies (e.g., Arkansas ~3.9%) | Varies; often same as residents | Some states have higher rates |
*For example, Arkansas charges about 3.9% state tax on lottery winnings.
It's important to note that all lottery winners pay federal taxes regardless of their state. Federal taxes start with a 24% withholding and can increase up to about 37% total federal tax depending on income bracket. Non-resident aliens winning in the US generally face a flat 30% federal withholding with few deductions allowed except for Canadian residents due to tax treaties.
Last night's Powerball draw took place on April 27, 2022, and the winning white ball numbers were 11, 36, 61, 62, 68, and the Powerball was 4. In addition to the jackpot winner, another player matched all five white balls for a $1 million pre-tax prize. Twenty-three players matched four white balls plus the Powerball for $50,000 wins.
Arizona lottery winners have 180 days from the date of the draw to claim/redeem their prize. In some states, winners have up to a year to come forward, with an unclaimed $1 million ticket expiring May 5, 2022, in Michigan. The lone winner of the jackpot can choose to receive the full jackpot in 29 annual payments or a one-time lump cash sum of $283.3 million.
The Powerball draw on April 27, 2022, ballooned the estimated jackpot to $473.1 million due to strong ticket sales. The largest single US lottery win occurred in 2018, with a $1.537 billion Mega Millions jackpot. The winning numbers from the New Hampshire Sweepstakes, marking the start of lotteries in the US, began operations in the early 1960s.
- In comparison to states like Arizona that impose taxes on lottery winnings, California offers its residents a tax-free win on casino-and-gambling activities such as lotteries.
- The casino-culture, including sports-betting and casino-games, in California provides an opportunity for big-wins, as the state does not impose a state tax on such winnings.
- Demonstrating a contrast in gambling trends, Arizona residents face a 2.5% state tax on their winnings from lotteries and casino-games, while California allows its residents to keep more of their winnings due to the absence of state tax.
- As sports-betting becomes increasingly popular, California's tax-free lottery winnings could attract more players, being a favorable destination in the casino-culture for those seeking big-wins.
