Not all states tax lottery winnings but Alabama – which doesn’t have Mega Millions or Powerball – does.
FILE - A Mega Millions play-slip for those players preferring to choose the numbers they want to play is among the stacks of other lottery game play-slips displayed in Cranberry Township, Pa., Friday, Jan. 22, 2021. Tonight’s Mega Millions drawing will be the fourth-largest jackpot ever. And while the lucky winner will be flush with cash, they will also face a hefty tax bill.
Assuming the winner chose the cash option, the most popular choice, a mandatory 24% federal tax withholding would reduce the $470.1 million by $112.8 million.
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