The Mega Millions player who claimed a $1.128 billion jackpot in New Jersey will face a hefty tax bill as the new year begins. Despite beating odds of one in 302.6 million, the winner will lose hundreds of millions to federal and state taxes.
The winning ticket, purchased at a ShopRite in Neptune, was for a March draw. The player selected their numbers manually and bought just one ticket.
They chose to take the prize as a lump sum, which has an estimated cash value of $537.5 million before taxes.Federal taxes will take 24%, or about $129 million. Because the prize pushes the winner into the highest tax bracket, they may owe an additional 13%, nearly $70 million more, according to CNBC.
New Jersey has one of the highest state lottery taxes at 8%, meaning another $43 million will be paid to the state.Unlike New Jersey, winners in California and Florida pay no state tax on lottery winnings.Altogether, the winner could pay up to $242 million in taxes.
The winner’s identity remains anonymous under a 2020 New Jersey law that protects lotto winners. However, those who win more than $600 must disclose their identity to lottery officials.
This $1.128 billion prize ranks as the fifth-largest Mega Millions jackpot ever.The next Mega Millions drawing is tonight, with a jackpot estimated at $970 million and a cash value near $440 million. Although no one won the jackpot in the last drawing, several players matched five numbers and will each receive about $1 million.
