An Arizona player who won a $112 million Mega Millions jackpot could see a large portion of the prize taken away in taxes before collecting their winnings.
The winner beat odds of roughly 1 in 302 million by matching all six numbers in the popular lottery game. Arizona winners have 180 days to claim their prize.
When claiming, the winner must choose between a lump sum or installment payments. Installments are paid over 30 years and increase gradually. However, most winners prefer the lump sum option.
For example, Edwin Castro, who won a $2.04 billion Powerball jackpot in 2022, took home about $997 million after taxes by choosing the lump sum.
The $112 million Mega Millions jackpot has a cash value of about $49.95 million before taxes. The winner must pay 24% federal tax, which would take roughly $12 million.
On top of that, Arizona state taxes will reduce the prize further. Arizona charges at least 4.8% in state tax, which means the winner could lose about $2 million more.
Despite the tax deductions, Arizona Lottery officials praised the win. “We are thrilled that an Arizona Lottery player won the first Mega Millions jackpot of the year,” said Alec Thomson, Arizona Lottery executive director.
This jackpot was the first Mega Millions win of the year, following a $1.2 billion prize claimed by a California player during the holidays.
Meanwhile, a Powerball player in Oregon won a $328 million jackpot. Like the Arizona winner, they can choose between a lump sum of $146.4 million or installment payments.
