You just won Monday's $1 billion Powerball jackpot.
But all of a sudden, that money is a lot smaller than $1 billion, thanks to those pesky federal and state taxes.
How much is a billion dollar Powerball jackpot?
Not actually a billion dollars, which is unfortunate for jackpot winners' billionaire ambitions. Under Ohio law, lottery winnings over $600 are taxed as income.
If you take the 30-year annuity payment, you could expect a net annual payment of $23 million after taxes are removed.
Should I take my Powerball payment as a lump sum or an annuity?
The lump sum affords more control over winnings and investments, but higher taxes overall. The annuity payment option means less initial control but lower taxes because it allows people to take advantage of yearly tax deductions. This decision is why some winners seek out a financial advisor after hitting the jackpot.
Does Ohio sell a lot of lottery and Powerball tickets?
Overall, the Ohio Lottery had $4.3 billion in sales in 2022.
Combined Powerball and Power Play sales for 2022 were $151.2 million or 3.5% of total traditional Ohio Lottery sales, according to the Ohio Lottery Commission.
Do local governments get lottery money?
The Ohio Lottery does not take out local income taxes that a winner might owe. Some Ohio communities collect as little as 1% or as high as 2.5% in the case of Akron. While the Ohio Lottery does not take out the local income taxes, a spokeswoman say they are regularly contacted by communities that suspect a winner has not paid his or her fair share. Some communities contact the lottery annually to review the list of big winners.
This article originally appeared on The Columbus Dispatch: How much a $1 billion Powerball lottery ticket would actually pay out