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Tax Implications of Lottery Winnings

The tax implications of choosing a lump sum versus an annuity for lottery winnings, including the effects on tax liability and tax brackets.

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Jan 14, 2026
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Which major U.S. state and national lotteries let winners choose lump-sum or annuity payouts?

Major national jackpots — Powerball and Mega Millions — give jackpot winners a formal choice between a one-time lump-sum "cash option" and an annuitized prize paid over decades, and most state-run lot...