An Illinois ticket holder won Wednesday night's $1.04 billion Powerball jackpot, the largest lottery prize of 2026, but the cash value after federal and state taxes will be roughly a quarter of the advertised sum.
The cash option math
The winner chooses between 30 annual payments totaling $1.04 billion or a lump sum of $450.5 million. After the mandatory 24 percent federal withholding and the 37 percent top marginal rate, the federal tax bill comes to about $166.7 million, leaving $283.8 million. Illinois then withholds 4.95 percent on the full $450.5 million, or $22.3 million, bringing the net to approximately $261.5 million.
The annuity path
Annual installments of roughly $34.7 million would be reduced to $21.8 million by the 37 percent federal marginal rate. The state tax still applies to the full advertised jackpot, spread across the three decades.
The context
The odds of winning were 1 in 292.2 million, marginally worse than Mega Millions at 1 in 290.4 million. This prize tops the $800 million Mega Millions jackpot claimed in Florida last Tuesday and the $250.8 million Powerball won in Arkansas earlier this year. Last month the game expanded to U.K. players, who can only take the annuity; the British lottery advertised the equivalent prize at £503 million, or $679.5 million, reflecting 30 years of payments after exchange rates and U.K. tax.
What to watch
The winner has not yet come forward. The lump sum is the overwhelming favorite historically, but the annuity provides a tax shelter of sorts by spreading the income across three decades at potentially lower marginal rates. Either way, the $1.04 billion figure remains a marketing number, the economic value is the cash option, and the government claims more than 40 percent of that.