I did not know that if you win 2nd place in the powerball drawing it is not really 1 million you winPrev Topic Next Topic

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shyguitar

United States
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February 1, 2012
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Aug 7, 2013, 1:14 pm

Hi everyone,

Well today I was on my state lottery website and was looking at the past winners for the last six months or so. I came across a woman who won 1 million on the powerball drawing for winning the 2nd prize. The problem was it said that she took the lump sum and would get 700,000 (and less after taxes) are taken out. I was under the impression that it was an automatic payment of 1 million minus taxes if you won the PB and didn't play with the multiplier. Was I the only one who didn't realize that's how it's done. I didn't know the 2nd prize could even be an annuity, I always assumed it was just the onetime payment. I know that if you win 1 million dollars on a scratch ticket and decide to take it as a lump sum it's 650,000 minus the taxes so it comes to around 450,000 after taxes. Now I have always said that I would be thrilled to win any kind of a prize but really wish the lottery would make it more clear on how much it truly is. I've always been upset that when it comes to scratch tickets they never really tell you on the ticket that it's not a true 1 million dollar payout. I totally understand that we have to pay state and federal taxes on any winnings over 600 dollars but just wish all this time I had known about the actual money you could win if you come in 2nd on the PB. Is this is the same thing if you come in 2nd on MM? I know they say you get 250,000 on MM for coming in 2nd but if you take it as a lump sum is it less also? I'm sure most of you people already knew this so your probably thinking I'm just dumb for not knowing it but I really didn't know.
maringoman

Massachusetts
United States
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April 14, 2006
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Aug 7, 2013, 4:37 pm

Quote: Originally posted by shyguitar on Aug 7, 2013
Hi everyone,

Well today I was on my state lottery website and was looking at the past winners for the last six months or so. I came across a woman who won 1 million on the powerball drawing for winning the 2nd prize. The problem was it said that she took the lump sum and would get 700,000 (and less after taxes) are taken out. I was under the impression that it was an automatic payment of 1 million minus taxes if you won the PB and didn't play with the multiplier. Was I the only one who didn't realize that's how it's done. I didn't know the 2nd prize could even be an annuity, I always assumed it was just the onetime payment. I know that if you win 1 million dollars on a scratch ticket and decide to take it as a lump sum it's 650,000 minus the taxes so it comes to around 450,000 after taxes. Now I have always said that I would be thrilled to win any kind of a prize but really wish the lottery would make it more clear on how much it truly is. I've always been upset that when it comes to scratch tickets they never really tell you on the ticket that it's not a true 1 million dollar payout. I totally understand that we have to pay state and federal taxes on any winnings over 600 dollars but just wish all this time I had known about the actual money you could win if you come in 2nd on the PB. Is this is the same thing if you come in 2nd on MM? I know they say you get 250,000 on MM for coming in 2nd but if you take it as a lump sum is it less also? I'm sure most of you people already knew this so your probably thinking I'm just dumb for not knowing it but I really didn't know.

Naw shyguitar, the second and lower prizes in PB are paid in lumpsum so after taxes you get everything. If you match 5 of 5 you are supposed to receive $1M. The withholding taxes are 25% federal and 5% state to bring the total to 30%.

30% of $1M is 300k.

That money's gone fo ever
dallascowboyfan

Oklahoma
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November 12, 2009
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Aug 7, 2013, 4:59 pm

Quote: Originally posted by maringoman on Aug 7, 2013
Naw shyguitar, the second and lower prizes in PB are paid in lumpsum so after taxes you get everything. If you match 5 of 5 you are supposed to receive $1M. The withholding taxes are 25% federal and 5% state to bring the total to 30%.

30% of $1M is 300k.

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White Shores- California
United States
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December 12, 2012
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Aug 7, 2013, 5:16 pm

Quote: Originally posted by shyguitar on Aug 7, 2013
Hi everyone,

Well today I was on my state lottery website and was looking at the past winners for the last six months or so. I came across a woman who won 1 million on the powerball drawing for winning the 2nd prize. The problem was it said that she took the lump sum and would get 700,000 (and less after taxes) are taken out. I was under the impression that it was an automatic payment of 1 million minus taxes if you won the PB and didn't play with the multiplier. Was I the only one who didn't realize that's how it's done. I didn't know the 2nd prize could even be an annuity, I always assumed it was just the onetime payment. I know that if you win 1 million dollars on a scratch ticket and decide to take it as a lump sum it's 650,000 minus the taxes so it comes to around 450,000 after taxes. Now I have always said that I would be thrilled to win any kind of a prize but really wish the lottery would make it more clear on how much it truly is. I've always been upset that when it comes to scratch tickets they never really tell you on the ticket that it's not a true 1 million dollar payout. I totally understand that we have to pay state and federal taxes on any winnings over 600 dollars but just wish all this time I had known about the actual money you could win if you come in 2nd on the PB. Is this is the same thing if you come in 2nd on MM? I know they say you get 250,000 on MM for coming in 2nd but if you take it as a lump sum is it less also? I'm sure most of you people already knew this so your probably thinking I'm just dumb for not knowing it but I really didn't know.

You said it yourself- you were under the impression.Your impression played tricks on you.You cannot forget the Taxes when dealing with money old chap.
The same is true for tonight's jackpot- if there is a winner, that person is not getting a check for $425 mil.
Artist77

United States
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January 16, 2012
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Aug 7, 2013, 7:46 pm

I was perusing this forum while I was at work during lunch and almost choked when I saw this...I thought...no!!!!, My master plan and $ calculations to win 2nd place is messed up. Glad to know it is a fixed amount. Whew!!!
billionaire2bee

United States
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July 25, 2012
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Aug 7, 2013, 8:06 pm

Here in ole NC it's 32% tax...so you only get 680,000 after taxes on your lump payout....I dont know how they do the scratch-offs i assume it's the same
savagegoose

adelaide sa
Australia
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April 11, 2006
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Aug 7, 2013, 10:16 pm

Quote: Originally posted by Artist77 on Aug 7, 2013
I was perusing this forum while I was at work during lunch and almost choked when I saw this...I thought...no!!!!, My master plan and $ calculations to win 2nd place is messed up. Glad to know it is a fixed amount. Whew!!!

its not fixed in Ca. its parimutuel there, assuming only 1 Ca. player hit the 5 numbers they could win several mill, lthough if many many won it they might only get $500k check out the Ca lotto site.

this 2nd prize winner got $3 mill

http://www.calottery.com/play/draw-games/powerball/winning-numbers/?DrawDate=Jul%2031,%202013&DrawNumber=33

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2014 = -1016; 2015= -1409; 2016 = -1171; 2017 = -1257 ; 2018 = - 1380 = TOT = - 6233

keno historic = -2291 ; 2015= -603; 2016= -424; 2017 =-427; 2018= -223 TOT = -3968

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shyguitar

United States
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February 1, 2012
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Aug 8, 2013, 8:22 am

Quote: Originally posted by maringoman on Aug 7, 2013
Naw shyguitar, the second and lower prizes in PB are paid in lumpsum so after taxes you get everything. If you match 5 of 5 you are supposed to receive $1M. The withholding taxes are 25% federal and 5% state to bring the total to 30%.

30% of $1M is 300k.

Hi maringoman,

I know that there are taxes on the 1 million but the strange thing is when I saw this person's name and that she won 2nd prize in PB it said she start with 700,000 not 1 million, then taxes would be taken from the 700,000. I even called our states lottery headquarters and the woman was saying that if you take the amount in an annuity then you get the full 1 million (minus taxes) but if you take the lump sum you are starting with less than 1 million which was 700,000 then the taxes are minused from that. At least that is what the lottery woman was telling me. I totally understand we have federal and state taxes to play but from what I was told it didn't seem to be starting from 1 million. Still confused.
schmuckatelly

Jacksonville, Florida
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March 17, 2013
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Aug 8, 2013, 11:18 am

Quote: Originally posted by shyguitar on Aug 8, 2013
Hi maringoman,

I know that there are taxes on the 1 million but the strange thing is when I saw this person's name and that she won 2nd prize in PB it said she start with 700,000 not 1 million, then taxes would be taken from the 700,000. I even called our states lottery headquarters and the woman was saying that if you take the amount in an annuity then you get the full 1 million (minus taxes) but if you take the lump sum you are starting with less than 1 million which was 700,000 then the taxes are minused from that. At least that is what the lottery woman was telling me. I totally understand we have federal and state taxes to play but from what I was told it didn't seem to be starting from 1 million. Still confused.

I think the lady was wrong.
Jon D

Los Angeles, California
United States
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January 5, 2011
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Aug 8, 2013, 12:06 pm

Quote: Originally posted by shyguitar on Aug 8, 2013
Hi maringoman,

I know that there are taxes on the 1 million but the strange thing is when I saw this person's name and that she won 2nd prize in PB it said she start with 700,000 not 1 million, then taxes would be taken from the 700,000. I even called our states lottery headquarters and the woman was saying that if you take the amount in an annuity then you get the full 1 million (minus taxes) but if you take the lump sum you are starting with less than 1 million which was 700,000 then the taxes are minused from that. At least that is what the lottery woman was telling me. I totally understand we have federal and state taxes to play but from what I was told it didn't seem to be starting from 1 million. Still confused.

The PB 2nd-9th prizes are fixed cash prizes, not annuitized.(and only in rare cases pari-mutuel)

I'm sure you misunderstood what was written on the website. Keep in mind, the 22yr old tekkie writing these articles is not the most expert in exact lottery and financial terminology, they got their script and just duplicate the marketing message.

Do you have a link or a quote? I just quickly persused the MA site, and saw this, is this it:

"May 29, 2013 Congratulations to Catherine Moriarty of Hyannis – she won a $1 million prize for matching the first five numbers (02-06-19-21-27) drawn in the Saturday, May 25 Powerball game. Moriarty, who is retired, received the prize in a one-time, lump sum payment of $700,000 (less taxes). She plans to use the winnings to undertake some home repairs and to invest the remaining funds."

That $700k is just minus the 30% taxes withheld initially, they are still responsible for the balance of taxes. Lump sum is just part of the script, doesn't mean there was ever an annuity option.

As for what you heard from customer service lady:

Your confusion probably confused her, so she gave you a confusing answer. I talked to lottery customer service before. Sounded like I called into DMV in da Hood! Rude people, yapping in the background. I wouldn't give any more credence to the exactness of their answer either.
Stack47

Kentucky
United States
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February 14, 2006
10,301 Posts
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Aug 8, 2013, 1:07 pm

Quote: Originally posted by Jon D on Aug 8, 2013
The PB 2nd-9th prizes are fixed cash prizes, not annuitized.(and only in rare cases pari-mutuel)

I'm sure you misunderstood what was written on the website. Keep in mind, the 22yr old tekkie writing these articles is not the most expert in exact lottery and financial terminology, they got their script and just duplicate the marketing message.

Do you have a link or a quote? I just quickly persused the MA site, and saw this, is this it:

"May 29, 2013 Congratulations to Catherine Moriarty of Hyannis – she won a $1 million prize for matching the first five numbers (02-06-19-21-27) drawn in the Saturday, May 25 Powerball game. Moriarty, who is retired, received the prize in a one-time, lump sum payment of $700,000 (less taxes). She plans to use the winnings to undertake some home repairs and to invest the remaining funds."

That $700k is just minus the 30% taxes withheld initially, they are still responsible for the balance of taxes. Lump sum is just part of the script, doesn't mean there was ever an annuity option.

As for what you heard from customer service lady:

Your confusion probably confused her, so she gave you a confusing answer. I talked to lottery customer service before. Sounded like I called into DMV in da Hood! Rude people, yapping in the background. I wouldn't give any more credence to the exactness of their answer either.

It looks like the lottery spokesman used the same terms they would use to describe a one time lump sum payment to jackpot player who took the cash value. The difference is the lump sum payment for a jackpot is opposed to multiple yearly payments of a larger amount. This example is simply saying the player won $1 million and will receive a check for $700,000 after taxes were deducted.
shyguitar

United States
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February 1, 2012
530 Posts
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Aug 8, 2013, 1:51 pm

Quote: Originally posted by Jon D on Aug 8, 2013
The PB 2nd-9th prizes are fixed cash prizes, not annuitized.(and only in rare cases pari-mutuel)

I'm sure you misunderstood what was written on the website. Keep in mind, the 22yr old tekkie writing these articles is not the most expert in exact lottery and financial terminology, they got their script and just duplicate the marketing message.

Do you have a link or a quote? I just quickly persused the MA site, and saw this, is this it:

"May 29, 2013 Congratulations to Catherine Moriarty of Hyannis – she won a $1 million prize for matching the first five numbers (02-06-19-21-27) drawn in the Saturday, May 25 Powerball game. Moriarty, who is retired, received the prize in a one-time, lump sum payment of $700,000 (less taxes). She plans to use the winnings to undertake some home repairs and to invest the remaining funds."

That $700k is just minus the 30% taxes withheld initially, they are still responsible for the balance of taxes. Lump sum is just part of the script, doesn't mean there was ever an annuity option.

As for what you heard from customer service lady:

Your confusion probably confused her, so she gave you a confusing answer. I talked to lottery customer service before. Sounded like I called into DMV in da Hood! Rude people, yapping in the background. I wouldn't give any more credence to the exactness of their answer either.

Hi Jon D,

You are correct about the woman from Hyannis as to what I was referring to. It was the way I was reading it may it seem like they meant that they were taking fed and state taxes out of 700,000 and not out of 1 million. Also the lottery lady made it also seem like what I had told her. Had she said that it's still 1 million just minus taxes being taken out (and of course taxes one has to when they do their taxes) then it would have cleared things up. Thanks. After you and another person tried explaining I will discount what the lottery person said.