How taxes impact your lottery money

The Powerball winning ticket is still up for grabs. But, how much money are you really getting after taxes kick in?

The Powerball is making headlines with no winning ticket since late December. Now, it’s up to $625 million, giving you another chance to try your luck. 

“I would pay for school and get that out the way, pay off all my debt and the rest would be fun money and go somewhere warm all year round,” said  Joshua Vee, a North Dakota resident. 

Vee has experience playing the lottery, although he had no luck that didn’t stop him hoping and wishing.

“Even if it was taxed at 50 percent that is still 300 million more than I have,” said Vee.

It may be the seventh-biggest jackpot in U.S. lottery history, but the money advertised isn’t what you’d see in the bank.

 “We are required by law to withhold federal and state taxes. The federal rate at 24 percent and state rate at 2.9 percent,” said Ryan Koppy, Sales and Marketing Manager with North Dakota Lottery Division.

If you were to win, you have two options. Cash option would be $380.6 million and with taxes taking out the player would end up with 278 million. The other option is an annuity option where you will get 30 payments made over 29 years.

“If you pass away the money would go to your estate. You wouldn’t lose out on the rest of the money,” said Koppy. 

Powerball has been around since 2004 in North Dakota and no one has ever had the winning ticket. 

“Whichever state you claim your ticket and your prize, then you have to go by there laws and rules. So, buying a ticket in North Dakota, you have to claim it in North Dakota. If you buy a ticket in another state but you live in North Dakota then you have to go back to that state that you purchased in. You can’t claim it here,” said Koppy.

In North Dakota, you have 180 days to claim your prize.  All unclaimed prizes will go to the state general fund. 

If you happen to have the winning ticket, the first thing you should do is sign the back of the ticket immediately because once it is lost anyone can claim the prize.

To claim your prize you can either do it in person at the lottery office or fill out a prize claim form and mail it to the lottery office along with ID and winning ticket.

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