Powerball Jackpot: Why the Winner Won't Actually Get $1.04 Billion
The winner can choose between an annuitized prize of $1.04 billion over 30 years, or a lump-sum payment of $450.5 million.
A player from Illinois claimed a $1.04 billion Powerball jackpot on Wednesday, marking it as the biggest prize in the game's history for 2026. To win, the lucky ticket matched the numbers 4, 26, 66, 67, 69, and Powerball 9, purchased at a Hy-Vee gas station in Quincy. Over three million tickets resulted in smaller winnings by matching at least one of the six drawn numbers.
This impressive jackpot was the eighth-largest in Powerball history, surpassing the $2.04 billion jackpot from November 2022 in California. Meanwhile, four tickets in Arizona, California, Florida, and North Carolina matched all five white balls, winning Match 5 prizes up to $1 million. However, the payouts in California are determined by a pari-mutuel system, taking into account ticket sales and the number of winners.
Another player in Massachusetts also won by matching all five white balls but doubled their prize to $2 million by opting for the Power Play feature. The top prize winner in Illinois remains anonymous, as Illinois law allows winners of prizes over $250,000 to remain confidential. They can choose between an annuitized prize of $1.04 billion or a lump-sum payment of $450.5 million, subject to federal and state income taxes.
The annuity payments are made over 30 years, increasing by around 5 percent each year to counter inflation. The lottery finances these payments by investing in government bonds, using both the principal and the interest. Winners can also opt for a cash option, typically about half the advertised jackpot, representing the actual money collected from ticket sales.
Federal and state taxes significantly reduce the winnings, with the IRS automatically withholding 24 percent upfront. The winner's final amount would be significantly lower if they choose the lump sum payment, with federal taxes cutting it to $342.4 million, followed by additional federal taxes, potentially reducing it to $283.8 million.
Illinois also taxes lottery winnings at 4.95 percent, further reducing the winnings by $22.3 million.
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