From advertised jackpot to money in the bank
Three reductions sit between the headline number and what a winner keeps:
- Annuity to cash. The advertised jackpot is what the lottery would pay as an annuity: 30 payments over 29 years, rising 5% a year. The cash option is the money actually in the jackpot prize pool, which is what it would cost today to fund that annuity.
- Federal withholding. The lottery withholds 24% of the prize for federal tax before paying you.
- The rest of the tax bill. A jackpot puts you in the 37% federal bracket, so the 24% withheld is only part of what you owe. State tax, where it applies, comes on top.
How big is the cash option really?
Here is the advertised jackpot and cash value for a few recent drawings, taken from the results feed our site uses:
| Drawing | Advertised jackpot | Cash value | Cash as % of advertised |
|---|---|---|---|
| Powerball, Oct 3, 2026 | $440 million | $181.3 million | 41.2% |
| Mega Millions, Oct 2, 2026 | $321 million | $131.1 million | 40.8% |
| Powerball, Aug 15, 2026 (after a jackpot win) | $20 million | $8.7 million | 43.5% |
| Powerball, Aug 12, 2026 | $1 billion | $433.1 million | 43.3% |
| Mega Millions, Jul 28, 2026 | $800 million | $344.2 million | 43.0% |
Across the 12 most recent drawings of each game, the cash share averaged 42.3% for Powerball and 42.4% for Mega Millions, ranging from about 41% to 43.5%. The size of the jackpot barely matters. What moves the ratio is interest rates: when rates are higher, an annuity costs less to fund today, so the cash option is a smaller share of the advertised figure. When rates were near zero, the share was much larger. The $1.05 billion Mega Millions jackpot won in Michigan in January 2021 had a cash value of $776.6 million, about 74%.
What is a $100 million jackpot really worth?
Here's an advertised $100 million jackpot worked through for a single winner who takes the cash, using a 42% cash share and the 37% federal rate as an approximation:
| Step | Amount |
|---|---|
| Advertised jackpot (annuity) | $100,000,000 |
| Cash value at about 42% | $42,000,000 |
| Federal withholding at 24% | −$10,080,000 |
| Further federal tax due at filing (up to about 37%) | −$5,460,000 |
| Net in a state that doesn't tax lottery prizes | about $26,460,000 |
| Net in a state taxing at about 10% | about $22,260,000 |
That's roughly 26 cents per advertised dollar where there's no state tax, and about 22 cents in a high-tax state. The federal and state tax breakdown covers the filing side, and lump sum vs annuity covers the choice between the two.
The rest of the prize chart
The jackpot gets the attention, but eight lower tiers pay out in every drawing. These are fixed cash amounts, paid once, with no annuity. The Mega Millions figures below are the minimums, which already include the built-in 2x multiplier on every $5 ticket; a bigger multiplier raises them.
| Match | Mega Millions (2x minimum) | Powerball (no Power Play) |
|---|---|---|
| 5 + bonus ball | Jackpot | Jackpot |
| 5 | $2,000,000 | $1,000,000 |
| 4 + bonus ball | $20,000 | $50,000 |
| 4 | $1,000 | $100 |
| 3 + bonus ball | $400 | $100 |
| 3 | $20 | $7 |
| 2 + bonus ball | $20 | $7 |
| 1 + bonus ball | $14 | $4 |
| Bonus ball only | $10 | $4 |
The same tax rules apply: 24% federal withholding once a prize (minus the ticket cost) is over $5,000. California is the exception on amounts, because its non-jackpot prizes are pari-mutuel and vary from draw to draw.
What is a "lotto division"?
"Division" is the word lotteries in Australia and New Zealand use for a prize tier. Division 1 is the top prize, Division 2 the next one down, and so on. US lotteries don't number their tiers; they describe the match instead, such as "5 + Powerball" or "4 of 5". If a site says a ticket won "Division 3", read it as the third prize tier of that game.
Many overseas games are also pari-mutuel, meaning each division shares a fixed percentage of the prize pool, so the amounts change every draw. Most US non-jackpot prizes are fixed amounts instead.
Jackpot cash value: common questions
What is the cash value of a lottery jackpot?
It's the lump sum a winner can take instead of the 30-year annuity, equal to the money in the jackpot prize pool. In recent Powerball and Mega Millions drawings it has been about 41% to 43% of the advertised jackpot.
How much of a $100 million jackpot do you actually keep?
Roughly $26.5 million if you take the cash in a state that doesn't tax lottery prizes, after the cash reduction and federal tax at about 37%. In a state that taxes winnings at around 10%, it's closer to $22 million.
Why is the cash option so much lower than the advertised jackpot?
The advertised figure adds up 30 annual payments that rise 5% a year. The cash option is what it costs today to fund those payments, which is much less. Higher interest rates make the gap wider.
What does Division 1 mean in the lottery?
It's the term Australian and New Zealand lotteries use for the top prize tier, the jackpot. US games describe tiers by what you matched, such as "5 + Powerball".
You can follow both games' jackpots, rollovers and resets on our Powerball jackpot history and Mega Millions jackpot history pages.
Cash-value ratios computed from the advertised jackpot and cash value reported for each drawing by the results API this site uses, 12 most recent drawings per game as of October 3, 2026. Prize amounts from powerball.com and megamillions.com. Tax figures are illustrative, not tax advice.
