How much in NJ taxes could be taken if you win Powerball

So here we are. Another Powerball drawing has come and gone, and no one hit the jackpot. Without a winner in Monday night’s drawing, it rolls over again for Wednesday’s drawing to $1.3 billion.

That makes it the fifth biggest Powerball jackpot in history and the ninth biggest of any lottery game in history in the United States. That will get your attention.

Now, when people buy a chance, most people opt for the cash value rather than get paid in annual checks over thirty years. The biggest reason is conventional wisdom saying you can make more by proper investing. For me, there would also be the paranoid thought of ‘Will this lottery fund really be solvent over three decades and be honored?’

Now take the following with a grain of salt and a just-for-fun endeavor. I found a site called comparethelotto.com, which claims it gives information on just what you’d pay in any given state in taxes if you hit big. You can toggle it to Michigan or Texas, or any state you want, and the tax rate and amount of course will be different. You can also put in the specific lottery jackpot amount won.

If you want to have fun with it yourself here it is. 

So don’t take this as tax advice. It’s a random thing I came across, and if you win a Powerball, you damn well better be seeing actual accountants and attorneys.

But with that caveat, I put in New Jersey with a lottery win of $1,300,000,000. Yes, that’s how many zeroes in $1.3 billion.

Here’s what it told me.

There would be a cash option reduction if $507 million right off the bat.

Leaving you with $793 million. I think we’re still doing okay.

Then the site says 24% would be automatically taken out for federal taxes. Is that all? That would be federal taxes of $190,320,000.

$599,680,000 is left. OK, we’re rounding to $600 million, which still feels good.

Then comes New Jersey. Land of the hand in your pocket. According to the site (and again, grain of salt) New Jersey would take $63,440,000 in taxes.

Having more than $500 million left is a good place to be. But then the site says once you have your money, the next time you file your income taxes, the state is going to want even more. Didn’t they just tax it?

Like I said, get an accountant.