Mega Millions Annuity Payout Calculator
Win a Mega Millions jackpot and you face a famous choice: 30 graduated annuity payments or one lump-sum cash payment. The advertised jackpot is always the annuity total, and the annuity checks grow 5% every year. This calculator lays out all 30 payments after federal, state and local tax, and when you enter the drawing’s published cash value it also compares the annuity head-to-head against the lump sum, so you can see what each choice really nets.
Enter the advertised jackpot, the cash option amount shown for the drawing (usually listed right next to the jackpot), your filing status, and your state and local rates. Federal tax is now computed bracket by bracket through the 2026 brackets on each annual payment, instead of one flat rate on every payment. The 24% federal withholding on large winnings is a prepayment, not the final tax, and it is no longer an input: the bracket calculation replaces both the 24% withholding view and the flat 37% view. Pick your state in the selector to fill in its 2026 rate automatically.
Quick Answer
On the pre-filled example, a $500 million jackpot with a $230 million cash option, single filer with a 5% state rate and no local tax, keeps $291,321,283 as an annuity under the 2026 bracket model: 30 payments starting at $4,408,959 after tax and rising 5% a year to $18,010,630. The cash option keeps $133,444,043 after bracket tax on the single lump sum. The annuity wins on total by $157,877,240; the cash wins on timing, because all of it arrives now.
Key takeaways
- The advertised jackpot is the sum of 30 graduated payments, not a check. The first payment is only about 1.5% of the headline figure.
- Each payment is 5% larger than the one before, so the 30th payment is roughly 4.1 times the first.
- The cash option is the present value of that stream. It tracks interest rates: near 41% of the advertised jackpot in October 2026, not the 50 to 60% older guides repeat.
- 24% federal withholding is a prepayment, not the final tax. This tool no longer asks for a federal rate at all: it taxes each payment through the 2026 brackets, so the withholding view and the filed-return view are the same calculation now.
- No flat federal rate is applied to any payment. Federal tax is bracketed payment by payment through the 2026 tables; state and local rates stay flat, as before, because the selector carries top state rates rather than full state bracket tables.
- Quick Answer
- How to use this annuity calculator
- How the Mega Millions annuity works
- Worked example: a $500 million jackpot, year by year
- Annuity or lump sum: the honest trade-offs
- The bracket model, stated plainly
- State tax rates on lottery winnings (2026)
- What competing calculators miss
- Frequently asked questions
- Add This Calculator to Your Website
- References
How to use this annuity calculator
Fill in the jackpot and your tax situation, click Calculate payout, and read the totals first, then the schedule. The results stay hidden until you calculate.
- Enter the advertised jackpot for the drawing you are modelling. If the jackpot was shared, enter your share of it, because the annuity is calculated on each winner’s portion.
- Enter the published cash value if you want the comparison. It is printed next to the jackpot in the official drawing results. Leave it blank and the tool reports the annuity alone, with a note explaining what is missing.
- Set the federal rate: 24% shows the withholding view (what is actually taken out before you see a payment), 37% approximates the filed-return view for a jackpot-sized win.
- Pick your state in the selector to load its 2026 rate, or type a state rate directly. Add a local rate only if your city or county taxes prizes: New York City, Yonkers and Maryland counties are the main cases.
- Read the schedule, not just the total: the year-by-year table shows gross, tax, net and running total for all 30 payments, which is the part winners actually budget against.
One sibling tool is worth knowing about: if you only care about the lump sum side, the Mega Millions cash option calculator isolates it, while the Mega Millions winnings calculator covers the smaller prize tiers as well as the jackpot.
How the Mega Millions annuity works
The advertised jackpot is the sum of 30 graduated payments: one immediately on claiming, then one a year for 29 years, each 5% larger than the one before. The lottery invests the cash value in government securities to fund the stream, which is why the annuity total is always bigger than the cash option: the difference is three decades of investment earnings, paid out to you instead of kept.
The 30 multipliers sum to 66.438848, so the first gross payment is the jackpot ÷ 66.438848. Payment n = first payment × 1.05n−1.
The election itself is time-boxed and one-way. Under the Virginia Lottery’s official Mega Millions game rules, a winner who does not elect the cash option within 60 days is paid under the annual payout option by default, and group claims must elect unanimously. The Arizona Lottery’s Mega Millions page states the same 60-day window, and California’s election form, described in the California Lottery Winner’s Handbook, makes the choice irrevocable once filed. In other words, the decision this calculator models has a deadline and no undo, which is a good reason to model it before you claim rather than after.
Taxes apply to each payment in the year you receive it, at the rates then in force. The Iowa Lottery’s Mega Millions page confirms the structure winners actually face: 30 payments over 29 years with the annual increase set by lottery officials (5% under the current game rules). What no calculator can know is your future tax law, which is one of the genuine risks priced into the annuity side of the comparison.
Worked example: a $500 million jackpot, year by year
Take an advertised $500 million jackpot with a $230 million cash option, single filer, 5% state tax and no local tax. The calculator is pre-filled with these figures, and every number below is a direct output of it:
- First gross payment: $500,000,000 / 66.438848 = $7,525,718
- Federal bracket tax on that payment: $2,740,473 (10% to 37% across the 2026 single brackets, an effective federal rate of 36.41% on this payment)
- State tax at 5%: $376,286; net first payment: $4,408,959
- Grow 5% a year for 29 more payments
- Final net payment: $18,010,630; total kept $291,321,283
| Year | Gross payment | Federal tax | State tax | Net payment | Running net total |
|---|---|---|---|---|---|
| 1 | $7,525,718 | $2,740,473 | $376,286 | $4,408,959 | $4,408,959 |
| 2 | $7,902,003 | $2,879,699 | $395,100 | $4,627,205 | $9,036,164 |
| 10 | $11,674,858 | $4,275,655 | $583,743 | $6,815,460 | $55,341,874 |
| 20 | $19,017,113 | $6,992,289 | $950,856 | $11,073,969 | $145,210,973 |
| 30 | $30,976,874 | $11,417,401 | $1,548,844 | $18,010,630 | $291,321,283 |
Two features of that schedule surprise most people. First, the running total passes the cash option’s $133,444,043 net during the 19th payment: after year 18 it stands at $123,588,270, after year 19 at $134,137,004. The annuity’s advantage is real but back-loaded, and it depends on collecting payments for three decades. Second, the average yearly payment, $9,710,709, is more than double the first payment, because the 5% growth compounds. Anyone budgeting on jackpot divided by 30 ($16.7 million a year) has the wrong shape entirely, a mistake several rival tools build into their math, as the competitor section below shows. Under the old flat-rate version of this page the same example kept $355,000,000, because a flat 24% federal rate understated the filed-return liability on payments of this size; the bracket model is the correction, not a worse deal.
Annuity or lump sum: the honest trade-offs
The annuity pays more in total and the lump sum pays everything now; every other consideration hangs off those two facts. Here is the trade-off laid out the way winners actually weigh it:
Take the annuity if…
- You want the largest possible total: on the worked example, $355.0 million kept against $163.3 million.
- You value a built-in spending brake. Thirty payments cannot be blown in one bad year.
- You are comfortable that payments are fixed in nominal terms and depend on the lottery honouring a 29-year schedule.
- You accept that future tax law applies to future payments, for better or worse.
Take the cash if…
- You want control now: investing, gifting, estate planning and business decisions start immediately.
- You believe your investments can beat the annuity’s implied return, which is what the cash discount represents.
- You prefer one tax event at known rates over thirty tax events at unknown future rates.
- You are older, or the prize is shared, and a 29-year tail does not fit the plan.
Most jackpot winners historically take the cash. A real recent claim shows the shape of that choice: the April 2025 Ohio winner of a $112 million jackpot, reported in an official Mega Millions news release, took a cash prize of $49,317,482 (44% of the advertised jackpot) and received $35,508,587 after combined state and federal tax of 28%. Neither choice is the naive one; they optimise for different things. If your interest is the present-value side of other lottery prizes, the cash value of lottery winnings calculator and the lotto annuity calculator cover the neighbouring games, and Powerball’s lump sum gets the same treatment in the Powerball lump sum calculator.
The bracket model, stated plainly
This calculator taxes each annual payment through the 2026 federal brackets, and taxes the cash option the same way as a single-year payment. State and local rates stay flat. That is an estimate, not a tax return, and you should know exactly where it bends the truth:
| Item | How this tool treats it |
|---|---|
| 2026 federal brackets (single) | 10% to $12,400; 12% to $50,400; 22% to $105,700; 24% to $201,775; 32% to $256,225; 35% to $640,600; 37% above that, per IRS Revenue Procedure 2025-32 |
| 24% withholding | Not an input any more. Withholding on lottery winnings over $5,000 is a prepayment credited against the real liability, per IRS Topic No. 419, Gambling Income and Losses |
| 30 graduated payments | The first on claiming and then one a year for 29 years, each 5% larger than the one before |
| State and local tax | Flat rates from the selector (top marginal rates for 2026) and the local field. For smaller prizes in graduated-bracket states, your effective state rate may be lower than the selector’s figure; you can always type the lower rate directly |
Why brackets instead of one rate? On a small payment the difference is large: the first payment of a $100,000 jackpot is about $1,505, and bracket tax on it as a single filer is about $151 (10%), against $361 at a flat 24% and $557 at a flat 37%. On eight- and nine-figure payments the difference against a flat 37% is small, because nearly every dollar sits in the top bracket anyway, but against the old 24% withholding default it is large in the other direction: the $500 million worked example keeps $291,321,283 bracketed, not $355,000,000. One more limit, stated plainly: brackets are applied to each payment from the bottom, as if the prize were the year’s only income. A winner whose other income already fills the lower brackets will face a higher marginal rate on these payments than this model shows, and in that case nearly every prize dollar is taxed at 37% federal. Nothing here is tax advice. A win of this size deserves a tax attorney and a fiduciary adviser before the claim, not after.
State tax rates on lottery winnings (2026)
Pick your state in the calculator above and the matching rate fills in automatically. These are the rates the selector uses: the top state income tax rate applied to a prize for 2026, as built into the calculator’s data. Alabama, Alaska, Hawaii, Nevada and Utah do not sell Mega Millions tickets, so they are not in the selector.
| State | Rate used by the calculator (%) |
|---|---|
| Arizona | 2.5 |
| Arkansas | 3.9 |
| California | 0 (exempt: California does not tax its own lottery prizes) |
| Colorado | 4.4 |
| Connecticut | 6.99 |
| Delaware | 6.6 |
| District of Columbia | 10.75 |
| Florida | 0 (no state income tax) |
| Georgia | 5.19 |
| Idaho | 5.3 |
| Illinois | 4.95 |
| Indiana | 2.95 |
| Iowa | 3.8 |
| Kansas | 5.58 |
| Kentucky | 3.5 |
| Louisiana | 3 |
| Maine | 7.15 |
| Maryland | 6.5 |
| Massachusetts | 9 |
| Michigan | 4.25 |
| Minnesota | 9.85 |
| Mississippi | 4 |
| Missouri | 4.7 |
| Montana | 5.65 |
| Nebraska | 4.55 |
| New Hampshire | 0 (no tax on lottery winnings) |
| New Jersey | 10.75 |
| New Mexico | 5.9 |
| New York | 10.9 |
| North Carolina | 3.99 |
| North Dakota | 2.5 |
| Ohio | 2.75 |
| Oklahoma | 4.5 |
| Oregon | 9.9 |
| Pennsylvania | 3.07 |
| Rhode Island | 5.99 |
| South Carolina | 6 |
| South Dakota | 0 (no state income tax) |
| Tennessee | 0 (no state income tax) |
| Texas | 0 (no state income tax) |
| Vermont | 8.75 |
| Virginia | 5.75 |
| Washington | 0 (no state income tax) |
| West Virginia | 4.82 |
| Wisconsin | 7.65 |
| Wyoming | 0 (no state income tax) |
Two things to watch. First, these are the top marginal rates, not a bracket-by-bracket calculation, so a smaller prize may be taxed below the headline figure in graduated-bracket states. Second, two local layers sit on top of the table: Maryland counties add their own income tax of 2.25% to 3.2% over the 6.5% state rate, and New York City adds up to 3.876% with Yonkers at 1.477%. The local tax field in the calculator exists for exactly those cases.
What competing calculators miss
Annuity tools for this keyword split into four camps, and three of them get the core structure wrong:
- Flat-payment tools (QuickAI Calculator): divide the jackpot by 30 and report equal yearly payments of about $16.67 million on a $500 million prize. Mega Millions payments are graduated, not flat: the real first payment is $7.5 million gross, less than half their figure, and the last is $31.0 million. Their lump sum is also a guessed 60% of the jackpot.
- Garbled-formula tools (SageCalculator’s annuity pages): one page states an “annuity factor” of about 38.6 and a first-year payment near $7.77 million on a $300 million jackpot. The true sum of the 30 growth multipliers is 66.438848, giving a first payment of $4.52 million gross on that jackpot. The error overstates early payments by more than 70%.
- Internally inconsistent tools (CalculatorDoc): show a $100 million jackpot producing $166 million of pre-tax annuity payments, more than the jackpot itself, with a first year of $3,333,333 that matches neither the flat nor the graduated model.
- Bracket-accurate tools (MegaMillionsCalculator.com): the strongest rival: real 2026 federal brackets per payment, the live official cash value, and filing-status modelling. Its gaps are a California-centred default, no local or city tax field, and no way to ask a simple what-if at your own flat rate.
- The gap this page fills: the drawing’s actual published cash value instead of a percentage guess, a 46-jurisdiction state selector with 2026 rates, a local tax field for New York City, Yonkers and Maryland counties, the full 30-row schedule with running totals, and the flat-rate simplification disclosed on the page rather than buried.
Frequently asked questions
Thirty: one payment immediately upon claiming, then 29 annual payments, each 5% larger than the previous one. The first is the smallest and the thirtieth is a little over four times as large, which is why the average payment in the results sits well above the first payment.
It is a one-time payment equal to the present value of the 30-payment annuity stream: the amount the lottery would otherwise invest to fund your payments. It is always smaller than the advertised jackpot and moves with interest rates: for the October 2026 drawings it sat near 41% of the advertised jackpot, well below the 50 to 60% many guides still repeat.
Federal withholding starts at 24% on prizes over $5,000, but that is a prepayment, not the bill: winnings are ordinary income, and this calculator taxes each payment through the 2026 federal brackets (10% to 37% by filing status) instead of applying one flat rate. State taxes range from 0% in states such as Florida and Texas to over 10% in New York, New Jersey and the District of Columbia, applied here as flat rates from the selector. Your other income, deductions and credits will move the real bill, so treat the result as the bracket shape of the prize alone.
There is no universally right answer. The annuity pays more in total after tax in almost every scenario this calculator can run, because its gross total is the full jackpot. The lump sum pays now, can be invested, and does not depend on a lottery honouring a 29-year schedule or on your own longevity. Run both through the calculator, then discuss the result with a tax professional before you claim, because the election is usually irrevocable once made.
No. They increase by a fixed 5% per year regardless of inflation. In a high-inflation decade the later payments buy noticeably less than winners expect; in a low-inflation decade the 5% growth outruns prices and the later payments gain purchasing power.
Yes. Powerball uses the same structure, 30 graduated payments rising 5% per year, so the annuity math applies equally. Enter the Powerball jackpot and its published cash value, and read the outputs as Powerball figures even though the summary line names Mega Millions.
Most places have none, but a few do: New York City adds up to 3.876%, Yonkers 1.477%, and Maryland counties add 2.25% to 3.2% on top of the state rate. Enter any local rate in the local / city tax field and the calculator applies it to every annuity payment and to the cash option, alongside federal and state tax.
Florida, Texas, Washington, Wyoming, South Dakota, Tennessee and New Hampshire have no state income tax that reaches a prize, and California exempts California Lottery prizes from its income tax even though it taxes other income. Alaska also has no income tax but does not sell Mega Millions tickets. Federal tax applies wherever the ticket was bought.
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References
- Internal Revenue Service. Topic No. 419, Gambling Income and Losses. Accessed October 22, 2026.
- Internal Revenue Service, via the New York State Society of CPAs. IRS Releases 2026 Inflation Adjustments and Tax Brackets (Revenue Procedure 2025-32). Accessed October 22, 2026.
- Tax Foundation. State Income Tax Rates and Brackets, 2026. Accessed October 22, 2026.
- Virginia Lottery. Mega Millions Final Rules for Game Operation (Director’s Order Eighty-Seven, 2026). Accessed October 22, 2026.
- Iowa Lottery. Mega Millions (cash vs annuity option, 30 payments over 29 years). Accessed October 22, 2026.
- Arizona Lottery. Mega Millions: How to Play (jackpot payment options and the 60-day election). Accessed October 22, 2026.
- California State Lottery. Winner’s Handbook (annuity vs cash option, graduated payments, federal withholding). Accessed October 22, 2026.
- California State Lottery. CSL 1280 Mega Millions Jackpot Payment Election (60-day, irrevocable election). Accessed October 22, 2026.
- Mega Millions (official). $112,000,000 Mega Millions Jackpot Claimed in Trust (cash option $49,317,482; $35,508,587 after tax). Accessed October 22, 2026.
- USA Mega. How to Play Mega Millions (cash option and jackpot annuity definitions). Accessed October 22, 2026.