The Powerball jackpot winner faces a $ 730 million single-digit state tax rate

The Powerball jackpot winner faces a $ 730 million single-digit state tax rate

A resident of Maryland was the lucky winner with $ 731.1 million on Wednesday The jackpot, The fourth largest in the history of the game.

The good news for the winner who bought the ticket in Ghani County is that he faces one number State tax rate.

Will win the lottery in Maryland $ 49 million In state taxes on the lump sum cash option – at a rate of 8.95%.

The state will take 8.95% each year on the annuity option.

The unpleasant news is that he still owes federal taxes, which will take a greater portion of the prize.

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In the case of lump sum, which is the most popular option, earnings would be estimated at $ 546.8 million before taxes.

Under the cash option, the jackpot is subject to a federal discount, which is 24% immediately before the winner gets a dime.

This would reduce the prize value by $ 131.2 million.

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The IRS will also likely charge earnings in the highest federal income bracket, which is 37% for people with incomes over $ 500,000. The winner will be indebted for any remaining difference between this tax rate of 37% and the federal withholding rate of 24% when the winner submits tax returns at the end of the year, deducting another $ 71.1 million approximately.

This means that about $ 202.3 million will be deducted in federal taxes, $ 49 million in state taxes, and the total grand prize will be approximately $ 295.5 million.

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