How the Mega Millions annuity is paid
A Mega Millions jackpot winner who chooses the annuity receives one payment right away, then 29 yearly payments, each 5% larger than the last. For the current $321 Million jackpot the first payment is $4,831,511 and the last is $19,887,153, before tax. The 30 payments add up to the advertised jackpot.
The first payment is the jackpot × 5% ÷ (1.0530 − 1), or about 1.505% of the jackpot. Every later payment is the one before multiplied by 1.05.
Annuity vs lump sum
The annuity pays more in total, but the money arrives over 29 years. The calculator converts the after-tax payments into today's money with a discount rate you set (4% by default — an assumption, not a recommendation). At the current jackpot, a single winner in Texas would take home $203,729,992 over 30 years, worth about $106,166,817 today at 4%, compared with $82,643,000 from the lump sum.
Each payment is taxed in the year you receive it, at that year's rates. The calculator assumes today's tax brackets stay the same; future tax law may differ. Compare with the Mega Millions calculator or see lottery tax by state.
Common questions
How much is the first Mega Millions annuity payment?
For the current $321 Million jackpot, the first annuity payment is $4,831,511 before tax. A single winner in a state with no income tax would keep about $3,093,851 of it after federal income tax. Later payments grow by 5% each year.
Is the Mega Millions annuity taxed all at once?
No. Each annuity payment is income in the year you receive it, so you pay federal and state tax on each payment as it arrives. A large payment is still taxed mostly at the top federal rate, but the tax is spread over 30 years.
What is the Mega Millions annuity worth in today's money?
It depends on the discount rate you assume. At 4%, the after-tax annuity for the current jackpot is worth about $106,166,817 today for a single winner with no state tax. Change the rate under “More options” to see how the comparison shifts.