A Mega Millions jackpot is advertised as the total of 30 yearly payments. The cash option is smaller: every jackpot won from January 2025 to July 2026 paid under half in cash. On the $803 million jackpot of July 28, 2026, the cash option was $345.5 million. After 37% federal tax, that's about $217.7 million.
Here's what to enter as the cash share, what the annuity is really worth, and what tax you'll owe.
What cash share should you enter?
The calculator needs the cash option as a percentage of the advertised jackpot, so divide one by the other. The calculator starts at 45%, but use the figure for your drawing. Mega Millions lists nine jackpots won between January 2025 and July 2026. Their cash options ran from 43.0% to 46.7% of the headline.
The share moves because of how the jackpot is set. Members of the Mega Millions Consortium meet every Tuesday and Friday morning to estimate it from sales forecasts. The advertised annuity is based on that day's 30-year U.S. Treasuries rate. Higher rates let the same cash fund a bigger annuity, so the cash share falls.
Here are four of those jackpots at the 37% top federal rate:
| Jackpot won | Cash share | Cash option after 37% | All 30 annuity payments after 37% |
|---|---|---|---|
| $803 million, July 28, 2026 (Florida) | 43.0% | $217,665,000 | $505,890,000 |
| $536 million, March 10, 2026 (Illinois) | 45.8% | $154,728,000 | $337,680,000 |
| $90 million, December 2, 2025 (New Jersey) | 46.7% | $26,460,000 | $56,700,000 |
| $983 million, November 14, 2025 (Georgia) | 46.1% | $285,768,000 | $619,290,000 |
The annuity adds up to more than twice the cash every time. That doesn't make it the better deal, since most of it arrives decades from now.
What rate is the annuity really paying?
Mega Millions pays an initial payment followed by 29 annual payments, each 5% larger than the previous one. That makes the first payment small:
The calculator's per-year figure is an even split instead: $1,666,667 a year before tax on that jackpot. Your first payment would be less than half of that.
Now value the payments at 5% a year. Discount each one back to the first payment's date, and its 5% raise cancels out exactly. Every payment is then worth the first, so the annuity is worth 30 × 1.505% = 45.2% of the jackpot.
Compare that with the cash shares above. A 43.0% cash share, as in July 2026, implies a rate a bit above 5%. December 2025's 46.7% implies a bit below. The cash comes out ahead only if your investments can beat about 5% a year after tax, for 29 years.
24% is withheld, but the top rate is 37%
Form W-2G's instructions tell payers to withhold 24% when lottery winnings minus the wager exceed $5,000. Annuity installments count too, because the total prize tops $5,000. For an annuity, the payer files a W-2G every year.
Withholding isn't the final tax, though. In IRS Revenue Procedure 2025-32's tables for 2026, the 37% rate starts above $640,600 of taxable income for single filers. For joint filers, it starts above $768,700. Here's the July 2026 jackpot both ways:
| $803 million jackpot, July 28, 2026 | Cash option after tax | Annuity after tax, yearly average |
|---|---|---|
| 24% withheld | $262,580,000 | $20,342,667 |
| 37% top federal rate | $217,665,000 | $16,863,000 |
On the cash option, withholding leaves $44,915,000 of federal tax uncovered. Set it aside the day the money arrives.
Is a flat 37% close enough? The lower brackets only reach the first $640,600 of a single filer's income:
That's about 0.01% of a $345.5 million cash option, so a flat 37% is close enough for planning.
Does your state tax the prize?
Mega Millions' FAQ says all prizes are subject to income taxes. Whether your state takes a share depends on its own rules. California's Franchise Tax Board, for one, says it does not tax California Lottery winnings, Mega Millions included.
If your state does tax lottery prizes, add its rate to the 37% in the tax field. The lottery tax calculator takes the state rate in its own field.
Before you choose: claim deadlines and heirs
Claim periods vary by jurisdiction, from 90 days to one year after the draw, Mega Millions says. Prize claim rules also vary from state to state, so check your state lottery's details before you claim.
The annuity also outlives you. If an annuity winner dies early, Mega Millions keeps paying as scheduled, to the designated beneficiary or the estate. Playing Powerball instead? The Powerball calculator runs the same comparison.