An Oregon lottery winner secured a prize of $1.326 billion Saturday night after buying a ticket in Northeast Portland. But before that sum is paid, the government will take its due.
Those taxes are hefty, no matter which payout the unidentified winner takes.
The federal government treats the lottery winnings as income. On prizes over $5,000, the Oregon Lottery withholds at least 24% for federal taxes and 8% for state taxes before paying the winner.
Oregon’s winner can take the full value of the prize — the fourth largest Powerball jackpot — in an annuity paid over 30 years or take a cash payout of $621 million.
If the winner takes the payout, as many do, the federal tax would cut the prize by around $149 million. In an estimate from USA Mega, an independent website tracking jackpot winnings, analysts predicted the winner will find themselves in a higher tax bracket and will incur an additional 13% tax rate, cutting another $81 million.
The lottery tracking group estimated a final Oregon tax rate of 9.9% or $61.48 million, reducing the prize to a final payout of $329,792,812.
In a post on X, formerly known as Twitter, state economist Josh Lehner said that the taxes collected on the cash prize would put Oregon 13% of the way to its next kicker tax credit.
Before taxes, the annuity payments would be about $44.2 million a year for 30 years. Those checks will drop to just under $27.9 million after the federal government takes its cut, according to USA Mega.
Oregon will take another $4.375 million from those yearly payments, leaving the winner with an average annual pay of $23,510,242, USA Mega predicts. Over the three decades, that adds up to over $705 million.
Saturday night’s drawing produced the first Powerball top prize winner since New Year’s Day, according to a statement from Powerball. The winning numbers were 22, 27, 44, 52, 69 and Powerball 9.
The overall odds of winning a Powerball prize are one in 24.9, the statement said. The odds of winning the jackpot are one in 292.2 million.
