8 Smart Things to Do Before Claiming a Powerball Jackpot
Before You Cash In Your Winning Powerball Ticket, Do These Important Things
Most of us dream about winning a big Powerball jackpot, but are you prepared if your winning number actually comes up? If your first instinct is to rush out and cash your ticket immediately, think again. Once you claim your jackpot, lots of things are going to start changing very quickly, and you want to be prepared. Here are 8 sensible things to do before you claim a Powerball prize.
1. Protect Your Winning Lottery Ticket
If you’ve just found out that you have won a Powerball jackpot, the very first thing that you should do is to sign the back.
Why? Because no one keeps track of who owns Powerball tickets. All you have to do to claim a Powerball prize is to show identification that matches the signature on the back. If your jackpot-winning ticket gets lost or stolen, anyone could claim your cash if you haven’t signed your ticket.
Now, one thing to e aware of before you sign: some states allow winners to let a trustee or foundation sign their ticket to help protect their anonymity. In 2018, a New Hampshire jackpot winner sued for the right to remove her name and add a trustee instead. She won her case, but you’d save yourself time and effort if you research whether you want to do this before you win your jackpot.
It’s a good idea to take pictures of the front and the back of the lottery ticket, to give you legal standing if the ticket is lost.
Once that’s been taken care of, find a safe place where you can keep your ticket while you get everything else straightened out. Since you won’t cash it in immediately, you’re going to want the peace of mind of knowing exactly where it is and that no one can get to it. A home safe, a lockbox, or a safety deposit box at a bank are all good options.
2. Check How Much Time You Have to Claim Your Powerball Prize
Your life is going to change as soon as you cash in your ticket, so you want to make sure that you have everything in order before that happens. To be able to plan your time, it’s important to know how long you have to sort things out before you claim your prize.
Every jurisdiction that sells Powerball tickets has its own rules about how long you have to claim your prize. Even the prize value affects how much time you have; jackpot winners sometimes have longer than winners of other prizes.
To find out how much time you have to plan before you claim your Powerball prize, look on your ticket. There should be a date there. If not, contact your local lottery and ask about their prize claim policy. Then put that time to good use; wait until nearly the end of your term before you cash in your winning ticket.
3. Find Out Whether You Can Remain Anonymous
Many winners want to stay anonymous after winning the lottery. There are many advantages: you won’t be pestered by people and organizations looking for money, or by journalists wanting an interview. You’ll have more control over how and when your life changes.
Unfortunately, anonymity isn’t always possible. Most jurisdictions want to announce their jackpot winners to show that the prizes are being awarded legitimately. So before you tell anyone about your lottery win, find out what your options for anonymity are.
In some jurisdictions, you must reveal your name, place of residence, and photo when you win a Powerball jackpot and the lottery commission must hand over that information to any third party that requests it.
In other areas, you can claim the prize under a trust, which can shield your true name. Sometimes, winners are allowed to use their first initial instead of their full first name, which can grant some protection.
If you live close enough to a state that protects its Powerball winners’ anonymity (such as Delaware, Kansas, Maryland, North Dakota, Ohio, and South Carolina) it might be worth traveling to those states to buy your tickets. Privacy laws depend on where you bought your ticket, not where you live.
4. Make Yourself Harder to Contact
Many of the lottery curse victims said that being constantly barraged by people who wanted to ask for anything from interviews to appearances on reality TV shows to handouts turned a dream win into a nightmare. Before you have to face that kind of pressure, make yourself harder for the paparazzi to get in touch with.
Change your telephone number, and only give the new number to people you trust. Set up a P.O. box for your mailing address. Delete your social media accounts (or start new, anonymous ones and follow only your closest real-life friends).
Although taking these steps might seem excessive, you will be grateful for the ability to control who can get in touch with you once you are in high demand.
5. Hire a Team of Experienced Professionals to Help You Manage Your Winnings
Before you claim your Powerball prize, you want to have a team in place who can protect you from legal problems and help you manage your money. At the very least, you are going to need a lawyer, an accountant, and a financial advisor. You’re going to need help setting up trusts, protecting yourself from frivolous lawsuits, and more.
It’s a good idea to look for professionals who have experience managing windfalls. Forbes has a list of questions to ask to ensure you find the right professional for you.
Aside from professionals to deal with your money, you might want to consider hiring a therapist. You might be surprised by the emotions that surround winning a big lottery prize.
You might feel stressed, overwhelmed, or even guilty for winning when someone else might have deserved it more. You might feel betrayed by so-called friends who let your money change their feelings toward you. A therapist can help you deal with these emotions in a healthy way, before they start getting you down.
6. Think About Your Options When Claiming Your Powerball Jackpot
When you win a Powerball jackpot, you’ll need to decide whether you will opt to receive a lump-sum or annuity payout. There is no one right answer; the correct decision depends on your personality and financial situation.
Consult with your financial advisors to help you determine the right course of action.
7. Write Down Your Goals and Dreams
Dreaming about what you would do with a huge Powerball payout is an exciting part of playing the lottery. and you don’t have to wait for a win to do it. If you actually win that jackpot, you’ll have the chance to make those dreams come true. But even a seemingly endless amount of money can disappear if you don’t have a plan for it.
To avoid this, take the time to set some concrete goals to achieve with your windfall. On that list should definitely be paying off any debt you have yourself. After that, you might think of goals like helping your friends and family, contributing to specific charities, big-ticket items for yourself like a new house, a new car, and a dream vacation, or perhaps even setting up a legacy like a trust to help your community or a wing in a local hospital.
If you need some inspiration, check out these Lottery Success Stories to see what other big lottery winners have accomplished with their millions.
Once you have your goals written down, you can take them to your financial advisors to help you find the best way to achieve them.
8. Think About What You Want to Stay the Same
A lot of things in your life are going to change once you have won a big jackpot, but there are probably some things that you want to stay the same. Thinking about those things ahead of time can help you protect them when things start getting crazy.
For example, while some people can’t wait to quit their jobs, others want to hold on to them. Your relationships might be very important to maintain. You might want to ensure that your children stay grounded or that you remain in a community that you care about. Thinking about these things before you claim your Powerball prize gives you firm goals to work toward.
Things NOT to Do Before Claiming Your Powerball Prize
There are a lot of wise things to do before you claim your Powerball prize, but there are a few things you definitely should not do as well. For example, you shouldn’t make any big changes right away including quitting your job, selling your house, or starting or ending a relationship. The time right after you win the lottery is very emotional, and you might not be making sound decisions.
There are other good reasons for keeping your job after winning the lottery. You might find out you’re not quite as rich (or at least, as cashflow positive) as you expect right away. And keeping your job might keep you grounded.
You also don’t want to start throwing your money around right away. It can take time for the money to show up in your bank account, and you want to have a solid plan and a strict budget before you start spending. Don’t worry, there will be plenty of time for the good life, you just want to make sure that you stay responsible and don’t make choices you will regret later.Won a big Powerball jackpot? Here are eight wise things to do before you claim your Powerball prize to ensure that you are happy with your winnings.
Powerball Frequently Asked Questions (FAQ)
Below are the answers to several frequently asked questions for Powerball. For questions that relate to a particular state, you may wish to contact your local lottery officials. If you have a question that is not answered here, you can try our Search page, or you can contact us.
Who can play Powerball?
You must be 18 years or older to purchase lottery tickets.
How is Powerball played?
Where can I purchase Powerball tickets?
When are Powerball drawings held?
The Powerball winning lottery numbers are drawn each Wednesday and Saturday at 10:59 p.m. Eastern Time (9:59 Central; 8:59 p.m. Mountain; 7:59 p.m. Pacific)
Where are Powerball drawings held?
Starting January 7, 2009, Powerball drawings are conducted at Universal Studios in Orlando, Florida. Previously, the drawings were held at ITC Studios in West Des Moines, Iowa since the inception of the game.
When can tickets be purchased?
Powerball tickets can be purchased from authorized lottery retailers up until approximately 10:45 p.m. Eastern Time the day of the drawing. The exact purchase cutoff time varies by state, so please check with a lottery retailer in your state for the precise time.
Can Powerball be played by mail?
No, federal law prohibits the mailing of lottery tickets.
Do I need to live in one of the Powerball states in order to win?
There is NO residency requirement to play and win Powerball. To illustrate this point, in the past, residents of non-Powerball states — even residents of other countries — have won prizes in every prize category, including the jackpot.
Can non-US citizens play? What if a non-US citizen wins?
Yes, non-US citizens can legally play, and non-US citizens are eligible to win any prize offered in the game.
If a non-US citizen wins, they would claim their prize in the same manner that a US citizen would, but the taxes withheld would be different. For example, federal withholding for non-US citizens is a flat 30%. Also, individual states may have different tax structures for non-US citizens than they do for US citizens. Depending on which country the person is a legal resident of, there also may be tax treaties between the US and that other country which could be helpful in offsetting whatever the US tax liabilities are.
In short, non-US citizens can play and win Powerball. If a non-US citizen wins a large prize, they will be responsible for some amount of tax, which in the end will probably be an amount similar to what a US citizen would pay, but there are so many possible variations with international tax codes that you’ll need to consult with a local tax attorney if you need to know a precise amount of tax liability.
How can I find out the Powerball jackpot?
Just go to USA Mega and you’ll find the current jackpot right at the top of the page. Also, most lottery retailers will have the current jackpot posted next to their lottery machine.
What is a Quick Pick?
A Quick Pick is a means to have the lottery machine automatically generate random numbers for you. Just tell your lottery retailer that you want a Quick Pick, and your ticket will be ready in seconds.
How do I claim a prize?
Check out the Ways to Win page, which includes information about how to claim a prize if you win.
Can I receive my winnings by mail?
Most states allow you to claim prizes by mail. Contact the lottery office in the state the ticket was purchased for details. You can find a list of official lottery Web sites on Lottery Post’s Lottery Links page. All state lottery Web sites contain contact information for the lottery.
Why is the cash option different than the advertised jackpot?
The Powerball jackpot is an estimated 29-year annuity value, with a total 30 payments (the first payment happens right away, followed by 29 annual payments). When players choose the annuity option for their prize, the state lottery pays the prize out over 29 years (30 payments) by buying U.S. Government Treasury Securities, which earn interest and mature annually over the 29 years. That annual return is the amount the winners receive each year for the 29 year period. With the cash option, the state lottery will take the amount of money that would have been invested and will pay it directly to the winner in one payment. Both payment options have federal and applicable state taxes deducted from them, although with an annuity option you pay taxes gradually on each annual payout, not all at once like with the cash option.
Why is the cash option always a different percentage of the annuity from draw to draw?
If you’re calculating what percentage the cash value is of the annuity, then you’re looking at it backwards. The cash value is the starting point, as it is a direct percentage of ticket sales. Then the annuity amount is calculated from that, based on prevailing interest rates. Since the interest rates are constantly changing, the annuity amount calculated on one day will be a different number than if it is calculated the next day. So when a drawing occurs and the lottery has to estimate the next annuity jackpot, they first estimate the number of tickets that will be sold for the next drawing, which determines what the cash value estimate is (because a fixed percentage of each ticket sold goes toward prizes). Then they finally calculate what the annuity will be based on the current interest rates.
After I buy a ticket, can it be changed from annuity to cash option?
Federal guidelines suggest that if you are a jackpot prize winner but did not choose the cash option at the time of purchase, you will have one last chance to choose the cash option. However, not all states adopt this guideline in the same manner, or at all. Please check with your state lottery to find out their policy regarding changing the payout option after winning the jackpot.
What is the Power Play?
Power Play is an option that is currently offered in all states that sell Powerball tickets except California. For an extra $1.00 per ticket you can increase your non-jackpot prize winnings by 2, 3, 4, 5, or 10 times. (The 10 times Power Play is only available when the jackpot is $150 million or less.) The Power Play number is randomly drawn from a pool of multipliers that includes two 5Xs, three 4Xs, 13 3Xs, and 24 2Xs, plus one 10X when the jackpot is $150 million or less.
Power Play is not available in California because of state law that requires all lottery prizes to be paid out on a pari-mutuel basis.
The Power Play multiplier number is chosen at random just before the Powerball winning numbers are drawn.
A player must choose the Power Play option when they buy their Powerball ticket, and then the ticket must match one of the 9 Ways to Win (except the jackpot) before the multiplier takes effect. Power Play costs an extra $1 per play. See How to Play Powerball for more information.
What if more than one person wins?
If more than one person wins the jackpot, the prize is equally divided among the winners. All other prizes, from $1,000,000 down to $4, are fixed prize amounts, and are paid in full to each winner.
Are lottery prizes taxable?
Lottery winnings of $600.01 and over are subject to Federal Withholding tax. For winnings of $600.01, up to and including $5,000, you will be issued a W-2G form to report your winnings on your federal income tax form. For winnings of $5,000.01 and over, your state’s Department of Revenue removes the 24 percent federal withholding before you receive your winnings check (or, if it is an annuity, from each winnings check). You then receive a W-2G form with each check to submit with your 1040 form to show that the 24 percent federal withholding already has been paid. In addition to federal tax, your state will make additional withholdings for taxes, and most states will deduct other money that you may owe to the state, such as back taxes, child support, loan payments, etc. In addition, like the federal tax withholding, the state tax withholding at the time of prize payout may not be the total state tax owed at the end of the year. You must consult your state division of taxation for more information about the total state tax requirements for lottery winners.
The state tax withholdings are as follows:
|Arizona||4.8% state withholding (Arizona residents), 6% state withholding (non-Arizona residents)|
|Arkansas||6.6% state withholding|
|California||No state tax on lottery prizes|
|Colorado||4.63% state withholding|
|Connecticut||6.99% state withholding|
|Delaware||6.6% state withholding|
|Florida||No state tax on lottery prizes|
|Georgia||5.75% state withholding|
|Idaho||6.925% state withholding|
|Illinois||4.95% state withholding|
|Indiana||3.23% state withholding|
|Iowa||5% state withholding|
|Kansas||5.7% state withholding|
|Kentucky||5% state withholding|
|Louisiana||6% state withholding|
|Maine||7.15% state withholding|
|Maryland||8.95% state withholding (Maryland residents), 8% state withholding (non-Maryland residents)|
|Massachusetts||5% state withholding|
|Michigan||4.25% state withholding|
|Minnesota||7.25% state withholding|
|Mississippi||5% state withholding|
|Missouri||4% state withholding|
|Montana||6.9% state withholding|
|Nebraska||5% state withholding|
|New Hampshire||No state tax on lottery prizes|
|New Jersey||8% state withholding|
|New Mexico||4.9% state withholding|
|New York||8.82% state withholding, plus: 3.876% (NYC residents), 1.323% (Yonkers residents)|
|North Carolina||5.25% state withholding|
|North Dakota||2.9% state withholding|
|Ohio||4.797% state withholding|
|Oklahoma||5% state withholding|
|Oregon||8% state withholding|
|Pennsylvania||3.07% state withholding|
|Puerto Rico||No state tax on lottery prizes|
|Rhode Island||5.99% state withholding|
|South Carolina||7% state withholding|
|South Dakota||No state tax on lottery prizes|
|Tennessee||No state tax on lottery prizes|
|Texas||No state tax on lottery prizes|
|U.S. Virgin Islands||† Unknown State Tax Rate|
|Vermont||6% state withholding|
|Virginia||4% state withholding|
|Washington||No state tax on lottery prizes|
|Washington, D.C.||8.95% state withholding|
|West Virginia||6.5% state withholding|
|Wisconsin||7.65% state withholding|
|Wyoming||No state tax on lottery prizes|
† This state/jurisdiction has not responded to our requests for this information.
If I live in a state that taxes prizes, but bought my ticket in a state with no tax on prizes, do I still need to pay state tax?
Yes, you do. Think of lottery prizes as regular earned income from a job. Just because you may work in a different state, that doesn’t permit you to get away with not paying state income tax in your state of residence. The lottery works the same way.
Whether it’s income from a job or income from gambling, the state where the money is won will tax the prize first at their out-of-state tax rate (assuming the state taxes lottery winnings). If your state of residence has the same or lower tax rate, then you won’t owe anything else. But if your state has a higher rate, you will get a credit for what you paid in the other state, and pay the difference to your state.
If the other state has no tax, you just pay the entire tax bill to your state.
The net result is that you end up paying whichever tax rate is higher between your state of residence and the state where you purchased the ticket. Of course, the tax law is quite complex and it’s possible that some condition or arrangement exists between the two states and a good tax attorney and/or accountant could discover a tax-saving loophole. That’s why we always recommend that major prize winners do not make any major decisions before first hiring a good legal and financial team.
One other option to consider, depending on how much in taxes you’re looking to save: the residency requirements as they relate to prize claims, state taxes, and income reporting. Since you aren’t responsible for paying taxes until you claim the prize, perhaps there is time to establish residency in the state where you purchased the ticket before the prize claim period expires. However, that is something you would definitely need to explore with an attorney before taking any action to assess the feasibility. You would also need to decide if it would be worth the risk of that important little piece of paper not getting lost, damaged, or destroyed in the time you spend arranging everything.
What are the odds of winning?
There are nine ways to win prizes:
|5 + 1||Jackpot||1 in 292,201,338|
|5 + 0||$1,000,000||1 in 11,688,054|
|4 + 1||$50,000||1 in 913,129|
|4 + 0||$100||1 in 36,525|
|3 + 1||$100||1 in 14,494|
|3 + 0||$7||1 in 580|
|2 + 1||$7||1 in 701|
|1 + 1||$4||1 in 92|
|0 + 1||$4||1 in 38|
|Overall odds of winning||1 in 24.9|
How can I reduce the taxes on a major lottery prize?
While we cannot advise players on taxes or the use of their individual prizes, we suggest you contact an attorney, tax preparer, the Internal Revenue Service (1-800-829-1040), or your state Department of Revenue. As always, a good financial plan will always make your money go further.
If I should win the jackpot, do I have the option of remaining anonymous as far as the public and the media are concerned?
In most states, lottery winner information is public domain, therefore it is public information. Publicized information normally includes the jackpot winner’s name, city, county, game in which they won, date won, and the amount of the prize.
How long do I have to claim a prize?
Your claim period varies by state, from 90 days to 1 year. Check the Ways to Win page for a list of states and their corresponding claim periods. After the claim period expires, your prize is reclaimed by the state.
What happens to unclaimed prizes?
The disposition of unclaimed prizes varies by state. Typically, the money is used for education programs, treatment programs, and to increase future prize pools.
What happens if I win an annuity and die before all the installments have been paid?
Your designated beneficiaries will receive the remaining payments.
What happens if I lose a winning ticket?
Your state’s lottery is not responsible for lost or stolen tickets. You should sign the back of your ticket in ink and take appropriate measures to safeguard it. Lottery tickets are bearer documents. Unless signed, anyone in possession of the ticket can file a claim.
Can lottery tickets be purchased over the internet?
No, lottery tickets cannot be sold over the internet. But as an alternative, we recommend that non-USA residents use our recommended lottery ticket service, which purchases Powerball lottery tickets from a licensed state lottery retailer on your behalf.
Is it legal to play the lottery over the Internet?
The state lotteries and MUSL (the organization that runs Powerball) are all very firm in their assertion that playing the lottery in any manner over the Internet is illegal. We are not lawyers and can’t provide legal advice, but we are not so sure about their position. Their absolute certainty that it is illegal may have more to do with not wanting to lose control of the player interaction, and less to do with a firm legal footing.
When we assess the legality, we look at what has actually happened in court cases. There have been people in the past who purchased a lottery ticket from an Internet Web site, subsequently won the jackpot, and the lottery attempted to block them from receiving the jackpot. In each case, the winners took the lottery to court and won. They received their jackpot as if they walked into a store and purchased a ticket.
You must keep in mind that any type of Internet-based lottery service is not risk-free. From a legal standpoint, the services are dealing in loopholes in the current law, and the US Congress has taken steps to make those loopholes tighter, particularly in trying to prevent banks and credit cards from allowing Internet payments for lottery services. But there is a much bigger threat when you use an Internet lottery service: getting ripped off.
By not making a purchase in a store, you may be doing something worse than throwing your money away: you may be helping to keep a scam operation running. Stay away from anything referring to a “syndicate”. We are not aware of any site using that terminology that is not a scam. Also beware of sites that state “Insured by ___” at the bottom. It is like saying “We don’t really buy lottery tickets, but trust us, you’ll get paid if you win.” Have you ever heard of an insurance company paying out a $200 million Powerball jackpot? We haven’t.
We do allow some advertising on USA Mega for lottery services. We recommend that USA residents stay away from such services, and make your purchases in a store. The ads are directed at non-USA residents, who may not have the online lottery restrictions that exist in the USA.
Where can I find information about how to play Powerball?
Information on draw days and times as well as game details on how to play can be found at our How to Play page.
Where can I find past winning numbers?
Check the Previous Results section of our site.
How can I make sure I don’t miss out on a large jackpot?
You can sign up for our Jackpot Alert feature. Using this feature, you set the minimum level of jackpot you wish to be notified about — anywhere from every jackpot up to $300 million. When the jackpot becomes the size you specified or larger, you automatically receive a short e-mail message. You’ll never miss out on a big jackpot again!
What determines the size of the jackpot?
The jackpot starts at a minimum of $40 million. For every consecutive drawing in which there is no winner, the jackpot is increased in relation to ticket sales, but will always be increased by a minimum of $10 million. When the jackpot becomes excessively large, it may increase substantially due to increased ticket sales. After a drawing in which one or more tickets wins the top prize, the jackpot is reset to the minimum $40 million level. The jackpot is divided evenly among all tickets winning the top prize in one drawing.
I heard there is a limit on the jackpot size. Is that true?
The feature that used to slow down the growth of record Powerball jackpots has been eliminated. It was called the Match 5 Bonus Pool, and was removed from the game starting with the January 18, 2012 drawing.
Where do lottery profits go?
Each participating Powerball state has its own laws regarding the disposition of lottery profits. Typically, lottery profits will go to education and schools, treatment programs, administrative/operating expenses, and other local causes.
When is your web site updated?
Current winning numbers are updated live, as the drawing happens, and are shown prominently on our Home Page. No other site has the current results sooner. Statistics and Previous Results are updated instantly when the drawing results are entered. The number of winners in each prize category, including the jackpot, is updated early in the morning after the drawing, when the information is official. The upcoming jackpot is updated immediately after the number of winners is tallied, and is shown on our Home Page. News is updated as it becomes available, often several times per day.Powerball Frequently Asked Questions (FAQ) Below are the answers to several frequently asked questions for Powerball. For questions that relate to a particular state, you may wish to contact your ]]>