Mega Millions winner worth $1.13 billion also wins New Jersey's huge tax bill
After 30 draws in which no ticket matched the five white and gold Mega Balls drawn, the Mega Millions jackpot was finally won Tuesday night.
Someone in the Garden State became rich overnight when the winning ticket was sold in New Jersey. The $2 item was purchased at the ShopRite grocery and liquor store in Neptune, west of Asbury Park.
The winning numbers are 7, 11, 22, 29, 38 and the Super Ball is 4. The jackpot won was worth $1.13 billion.
The lucky winner will have to decide whether to accept a one-time cash option of $537.5 million or pay the entire prize in 29 annual installments, increasing by about 5% each year. Neither price takes into account the effective federal tax rate of 37 percent, which is levied on the country's top earners. The IRS defines it as anyone who earns more than $578,126 for a single filer or $693,751 for a married couple filing jointly.
HUGE TAX BILL
Eight states do not tax lottery winnings — California, Florida, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming. The rest allow lottery games with tax rates ranging from 2.5% in Arizona to 10.9% in New York.
Unfortunately for lucky millionaires, New Jersey doesn't lag behind New York in terms of access to most lottery assets. The Garden State imposes an effective 10.75% tax on lottery winnings, which will significantly reduce Tuesday night's huge jackpots.
If the winner chooses the cash option (which has historically been the preferred withdrawal method for Mega Millions and Powerball jackpot winners), Tuesday night's jackpot will be higher despite rising inflation causing jackpots to accelerate and complicating the decision. Reaching $537.5 million would immediately reduce federal taxes by approximately $198.8 million. The eight states that do not further tax the jackpot would leave the winner with a net worth of approximately $338.66 million.
New Jersey’s 10.75% lottery tax would reduce spending by an additional $57.7 million, netting about $281 million. That's still a generational fortune, though giving Trenton nearly $58 million is a big pill to swallow.
New Jersey is not a particularly good place to play Millionaire and Powerball. The $1.13 billion jackpot marks the first time New Jersey has entered the Top 25 list for Mega Millions and Powerball jackpots.
We may never know the identity of Tuesday night's winner because New Jersey lottery winners can remain anonymous. Tickets must be redeemed within one year.
Historic victory
Tuesday night's $1.13 billion Mega Millions jackpot was the eighth-largest lottery jackpot in U.S. history.
"Congratulations to the New Jersey Lottery for selling a winning ticket in Tuesday's $1.13 billion Mega Millions drawing," said Gretchen Corbin, president and CEO of the Georgia Lottery and executive director of the Mega Millions Alliance. "We celebrate the new jackpot winner, as well as all the prizes won and funds raised for good causes in this exciting jackpot event."
The Mega Millions Consortium said there were more than 29.9 million winning tickets across 31 drawings, with the majority being for the smallest prize, a $2 cashback bonus. During the tournament, 56 tickets matched the five white balls, but the gold Super Ball was matched to win the second prize of $1 million.
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Source: www.casino.org
