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 $443 Million jackpot the first payment is $6,667,786 and the last is $27,445,510, before tax, and the 30 payments add up to the full $443 Million.
The first payment is the jackpot × 5% ÷ (1.0530 − 1), about 1.505% of the jackpot; each later one is the one before multiplied by 1.05. Mega Millions is drawn Tuesday and Friday and sold in 45 states plus the District of Columbia and the U.S. Virgin Islands, and the annuity works the same wherever the ticket was bought.
Mega Millions annuity vs lump sum
The cash option for the current jackpot is $186.5 Million, 42.1% of the advertised amount. A single winner in Texas would take home $117,545,000 from the cash, or $280,589,993 over 30 years from the annuity. To compare money paid at different times, the calculator converts the annuity into today's money at a discount rate you set (4% by default — an assumption, not a recommendation): at 4% this annuity is worth about $146,175,077 today. The break-even return is 5.56%: the cash comes out ahead only if it can earn more than that a year.
The calculator taxes every payment in its own year at 2026 rates and assumes they stay the same; future tax law may differ. For the cash option after taxes in every state, use the Mega Millions calculator; state rates are in lottery tax by state.
Mega Millions: test a different outcome
If the final Mega Millions jackpot and cash value both came in 10% below today’s estimates, the first before-tax installment would be $6,001,007 instead of $6,667,786. This is a sensitivity scenario, not a forecast; replace both announced amounts when they become final.
| Discount rate | Annuity in today’s dollars | Compared with cash |
|---|---|---|
| 0% | $280,589,993 | Annuity by $163,044,993 |
| 2% | $199,098,889 | Annuity by $81,553,889 |
| 4% | $146,175,077 | Annuity by $28,630,077 |
| 6% | $110,937,721 | Cash by $6,607,279 |
Single Texas resident, no other income; cash after estimated tax $117,545,000. All payments use 2026 tax law. No investment-return tax or future law changes are modeled. A higher discounted value does not guarantee a better personal outcome.
How Mega Millions sets its annuity
The Mega Millions Consortium meets every Tuesday and Friday morning, adds up each state's sales forecast and estimates the next two jackpots. The cash value comes from those forecast sales; the advertised annuity is that cash turned into 30 payments at the day's 30-year U.S. Treasuries rate, which can move from one drawing day to the next (Mega Millions FAQ). For this drawing the cash value is 42.1% of the advertised $443 Million.
Why the final Mega Millions jackpot can differ
As much as 70% of Mega Millions sales typically happen on drawing day, so the advertised figure is a forecast. A winner receives the jackpot based on actual sales, whether they take the cash or the annuity, and actual jackpots have come in above, below and equal to the estimate in roughly similar proportions (Mega Millions FAQ). If the jackpot you are calculating has already been won, use the final amount the lottery announced rather than the pre-drawing estimate.
If a Mega Millions annuity winner dies
Mega Millions keeps paying the annual installments as scheduled, to the winner's designated beneficiary or to the winner's estate (Mega Millions FAQ). Powerball words its rule differently: it pays the balance to the estate and continues annual payments to heirs with a court order, as explained on the Powerball annuity calculator. Either way, each payment is still taxable income in the year it arrives.
Annuity payments for the biggest Mega Millions jackpots
7 Mega Millions jackpots have reached $1 billion. Under today's annuity rules — 30 payments, each 5% larger than the last — the first payment for these jackpots would range from $15,804,007 to $24,112,399 before tax. The cash value — what a winner gets by taking the lump sum — ranged from 45.1% of the advertised jackpot (Dec 27, 2024) to 74.0% (Jan 22, 2021). Official announcements state the winner's choice for 2 tickets: South Carolina (Oct 23, 2018), cash option; Maine (Jan 13, 2023), cash option. The others do not say.
| Drawing | Jackpot | First payment | Final payment | Cash value as % of jackpot |
|---|---|---|---|---|
| Aug 8, 2023 | $1.602 Billion | $24,112,399 | $99,249,904 | 49.6% |
| Oct 23, 2018 | $1.537 Billion | $23,134,056 | $95,222,910 | 57.1% |
| Jan 13, 2023 | $1.348 Billion | $20,289,334 | $83,513,652 | 53.7% |
| Jul 29, 2022 | $1.337 Billion | $20,123,769 | $82,832,161 | 58.4% |
| Dec 27, 2024 | $1.269 Billion | $19,100,271 | $78,619,306 | 45.1% |
| Mar 26, 2024 | $1.128 Billion | $16,978,019 | $69,883,827 | 47.6% |
| Jan 22, 2021 | $1.05 Billion | $15,804,007 | $65,051,435 | 74.0% |
Payments are worked out with today's annuity rules for the whole jackpot, before tax; older jackpots may have been paid on the schedule in force at the time, and a shared jackpot is split between the winning tickets. Jackpot and cash amounts from official Mega Millions announcements, listed with sources on the largest jackpots page.
Common questions
How much is the first Mega Millions annuity payment?
For the current $443 Million jackpot, the first annuity payment is $6,667,786 before tax. A single winner in a state with no income tax would keep about $4,250,705 of it after federal income tax. The second payment, a year later, is $7,001,175.
Is the Mega Millions annuity taxed all at once?
No. Each payment is income in the year it arrives. For the current jackpot, federal tax on the first payment of $6,667,786 is about $2,417,081, and on the final payment of $27,445,510 about $10,104,839, for a single winner with no state income tax. State tax, where it applies, is also paid year by year.
What is the Mega Millions annuity worth in today's money?
For the current jackpot, the after-tax annuity of a single winner with no state tax is worth about $146,175,077 today at a 4% discount rate, or $110,937,721 at 6%, against $117,545,000 from the cash option. Set your own rate under “More options”.