Powerball Jackpot: Best and Worst States for Winners

CatLane / Getty Images
CatLane / Getty Images

The record $2 billion Powerball jackpot made news, and not for the exorbitant prize or the extremely low odds of winning -- about 1 in 292.2 million. Early Tuesday, Nov. 8, 2022, while lottery players waited with baited breath, no winner was declared. Officials announced the drawing was delayed due to a technical problem, likely with the high number of ticket sales.

A winner was eventually announced later Tuesday morning.

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While $2 billion is a nice chunk of change, what ends up in the bank account can significantly change depending on where the lucky winner resides.

Indeed, while in some countries lottery winnings are not taxed, in the U.S. they are -- and it varies state by state.

According to the Powerball website, a jackpot winner may choose to receive the prize as an annuity, paid in 30 graduated payments over 29 years, or as a lump sum payment. But both prize options are prior to federal and jurisdictional taxes.

First off, all winnings over $5,000 are subject to tax withholding by lottery agencies at the rate of 24%, according to TurboTax. And, if you opt to take the winnings in a lump sum, you will be in the highest tax bracket, which is 37%.

For the previous $1.5 billion jackpot, the cash subtotal would be around $470 million after federal taxes, according to usamega.com. The annual annuity subtotal would be about $31.5 million after federal taxes.

On top of that, there are state taxes, which vary wildly. Let's take a look at the best and worst states to win the Powerball jackpot.

Florida_Powerball_iStock-537371126
Florida_Powerball_iStock-537371126

Best States To Win Powerball

There are eight states that do not tax Powerball winnings: California, Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming. Pennsylvania, North Dakota, Indiana and Ohio also make our list of best states.

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Washington_Powerball_iStock-171275376
Washington_Powerball_iStock-171275376

1. California, Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming

If you're lucky enough to have bought your winning ticket in one of these states, you won't pay any taxes at the state level.

powerofforever / Getty Images
powerofforever / Getty Images

2. North Dakota

State tax: 2.9%

ANNUITY

  • Subtotal after federal taxes: $31,537,045

  • State taxes: $1,450,000

  • Annual payments: $30,087,045

  • Total net payout: $902,611,350

CASH

  • Subtotal after federal taxes: $469,954,045

  • State taxes: $21,631,100

  • Total net payout: $448,322,945

Pennsylvania_Powerball_iStock-476422716
Pennsylvania_Powerball_iStock-476422716

3. Pennsylvania

State tax: 3.07%

ANNUITY

  • Subtotal after federal taxes: $31,537,045

  • State taxes: $1,535,000

  • Annual payments: $30,002,045

  • Total net payout: $900,061,350

CASH

  • Subtotal after federal taxes: $469,954,045

  • State taxes: $22,899,130

  • Total net payout: $447,054,915

ChrisBoswell / Getty Images/iStockphoto
ChrisBoswell / Getty Images/iStockphoto

4. Indiana

State tax: 3.23%

ANNUITY

  • Subtotal after federal taxes: $31,537,045

  • State taxes: $1,615,000

  • Annual payments: $29,922,045

  • Total net payout: $897,661,350

CASH

  • Subtotal after federal taxes: $469,954,045

  • State taxes: $24,092,570

  • Total net payout: $445,861,475

Sean Pavone / Shutterstock.com
Sean Pavone / Shutterstock.com

5. Ohio

State tax: 3.99%

ANNUITY

  • Subtotal after federal taxes: $31,537,045

  • State taxes: $1,995,000

  • Annual payments: $29,542,045

  • Total net payout: $886,261,350

CASH

  • Subtotal after federal taxes: $469,954,045

  • State taxes: $29,761,410

  • Total net payout: $440,192,635

dennizn / Shutterstock.com
dennizn / Shutterstock.com

Worst States To Win Powerball

The five worst states for lottery taxation are New York, New Jersey, Oregon, Minnesota and Maryland. Washington, D.C., also is included in this bottom five.

Majestic_Aerials / Getty Images
Majestic_Aerials / Getty Images

5. Maryland

State tax: 8.95%

ANNUITY

  • Subtotal after federal taxes: $31,537,045

  • State taxes: $4,475,000

  • Annual payments: $27,062,045

  • Total net payout: $811,861,350

CASH

  • Subtotal after federal taxes: $469,954,045

  • State taxes: $66,758,050

  • Total net payout: $403,195,995

culbertson / Getty Images/iStockphoto
culbertson / Getty Images/iStockphoto

4. Minnesota

State tax: 9.85%

ANNUITY

  • Subtotal after federal taxes: $31,537,045

  • State taxes: $4,925,000

  • Annual payments: $26,612,045

  • Total net payout: $798,361,350

CASH

  • Subtotal after federal taxes: $469,954,045

  • State taxes: $73,471,150

  • Total net payout: $396,482,895

GarysFRP / iStock.com
GarysFRP / iStock.com

3. Oregon

State tax: 9.9%

ANNUITY

  • Subtotal after federal taxes: $31,537,045

  • State taxes: $4,950,000

  • Annual payments: $26,587,045

  • Total net payout: $797,611,350

CASH

  • Subtotal after federal taxes: $469,954,045

  • State taxes: $73,844,100

  • Total net payout: $396,109,945

Shutterstock.com
Shutterstock.com

2. New Jersey & Washington, D.C.

State/District tax: 10.75%

ANNUITY

  • Subtotal after federal taxes: $31,537,045

  • State taxes: $5,375,000

  • Annual payments: $26,162,045

  • Total net payout: $784,861,350

CASH

  • Subtotal after federal taxes: $469,954,045

  • State taxes: $80,184,250

  • Total net payout: $389,769,795

dennizn / Shutterstock.com
dennizn / Shutterstock.com

1. New York

State tax: 10.9%

ANNUITY

  • Subtotal after federal taxes: $31,537,045

  • State taxes: $5,450,000

  • Annual payments: $26,087,045

  • Total net payout: $782,611,350

CASH

  • Subtotal after federal taxes: $469,954,045

  • State taxes: $81,303,100

  • Total net payout: $388,650,945

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This article originally appeared on GOBankingRates.com: Powerball Jackpot: Best and Worst States for Winners