The Mega Millions jackpot has hit $604 million, a record for this year so far, and one lucky winner - or multiple - could take it home when numbers are drawn Friday at 11 p.m. Eastern.
But the jackpot isn’t as big as it seems. Players who choose to cash out their winnings upfront, instead of through yearly payments, will win $266.3 million, as of Thursday.
And, they’ll lose as much as 40 to 50 percent of their haul to federal and state taxes, depending on where they live, according to financial services firm Catalina Structured Funding.
“We see winners caught off guard by this - the total effective tax rate on a large jackpot can reach 40% to 50% when combining federal and state taxes,” Catalina notes.
Winners in California, Florida, New Hampshire, South Dakota, Tennessee, Texas and Washington won’t pay any state taxes on their winnings, according to Catalina.
Meanwhile, residents in New York City and Yonkers pay the highest Mega Millions tax rates in the nation - 14.776 percent and 12.377 percent, respectively.
Those national highs are followed by the District of Columbia and New Jersey at 10.75 percent, Oregon (9.90 percent) and Minnesota (9.85 percent), Catalina said.
The Internal Revenue Service treats lottery winnings as taxable income, so winners pay federal taxes, too. For 2026, the tax rate is 37 percent on income above $640,600 for single filers and $768,700 for married filing jointly, according to the IRS.
So, a lottery winner could pay as little as 37 percent on most of their winnings or as much as 51.776 percent.
Those tax rates could mean that a single winner of Thursday’s cash-out amount would take home as much as $167.7 million or as little as $128.4 million.
If someone wins the jackpot on Friday, it would be the biggest one of the year, surpassing a $536 million prize won on March 10 by an anonymous player in Illinois, according to Mega Millions.
It’s the second-highest jackpot in the past two years, trailing behind a $983 million win in November 2025.
Overall, there have been seven jackpots that eclipsed the $1 billion mark, according to Mega Millions. The first one happened in October 2018, when an anonymous player in South Carolina won a $1.54 billion prize.
The biggest jackpot in Mega Millions history came in August 2023, when a single ticket won $1.6 billion.
A ticket costs $5 and requires players to pick six numbers. The chances of matching all six numbers to win the jackpot are 1-in-290,472,336.
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