A KENTUCKY man got lucky in the Powerball Lottery department this month.
Sanford Meyers from Leitchfield managed to win the $50,000 Powerball prize - but he lost out on over $10,000 of it.
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His winning ticket successfully matched four white ball numbers and the Powerball, clinching the game's $50,000 jackpot.
Purchased at Center Court Food Mart, the ticket had been sitting untouched on Meyers' desk for several days before he finally decided to check it.
Despite not being an avid player, Meyers typically purchases a Powerball ticket once a month, making this win even more surprising.
"I told my wife I needed to look at that thing," Meyers recounted.
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"I pulled up the website and looked at it [ticket] and said, 'I think I won a hundred and fifty bucks.'"
Later that day, Meyers took the ticket to a store to verify it, where the store clerk confirmed the happy news.
"I said, ‘you’re kidding me?’ I made her scan it at least three times.”
Center Court Food Mart will also receive $500 for selling the winning ticket.
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TOTALLY TAXING
Meyers visited lottery headquarters on May 9 and received $36,000, meaning he lost $12,000 to state and federal taxes.
Check Your Tickets! Unclaimed $2 Million Powerball Prize
The IRS classifies net lottery winnings as ordinary taxable income, which means that after subtracting the ticket cost, the remaining amount is subject to federal income taxes.
Your tax liability depends on your tax bracket, determined by your winnings and other income sources.
Typically, the IRS withholds 25%, and you're responsible for the rest when you file.
However, there's a bright side for those in the highest tax bracket because federal income tax operates on a progressive scale.
Ways to win Powerball
Powerball drawings happen three times a week. There are several combinations to win money.
- Match five white balls and the Powerball for the jackpot (one in 292,201,338 odds)
- Match five white balls for $1 million (one in 11,688,053.52 odds)
- Match four white balls and the Powerball for $50,000 (one in 913,129.18 odds)
- Match four white balls for $100 (one in 36,525.17 odds)
- Match three white balls and the Powerball for $100 (one in 14,494.11 odds)
- Match three white balls for $7 (one in 579.76 odds)
- Match two white balls and the Powerball for $7 (one in 701.33 odds)
- Match one white ball and the Powerball for $4 (one in 91.98 odds)
- Match only the Powerball for $4 (one in 38.32 odds)
For example, as a single filer in 2022, after considering deductions, your tax rates are as follows, according to Yahoo Finance:
- 10% on the first $10,275 you earn
- 12% on the next $31,500
- 22% on the next $47,300
- 24% on the next $80,975
- 32% on the next $45,900
- 35% on the next $323,950
- 37% on any amount more than $539,900
During tax season, it's crucial to remember that some states also tax lottery winnings, with rates varying from about 2.9% to 8.82% in states with an income tax.
Nine states don't impose state income tax, including:
- Alaska
- Florida
- Nevada
- New Hampshire
- South Dakota
- Tennessee
- Texas
- Washington
- Wyoming
If you live in one state but buy a ticket in another, generally, the state where you purchased the ticket (and where the prize is distributed) will withhold taxes at its applicable rate.
Calculating the exact amount owed to your state at tax time might involve some math because you'll receive a credit for the amount already withheld, and the states involved will sort out the tax allocation between them.
In Kentucky, lottery prize proceeds are subject to the state's income tax rate, according to Kentucky.com.
Starting in 2023, the rate dropped from 5% to 4.5%, with the potential for a further 0.5% reduction if certain conditions are met and the legislature approves the decrease.
Even if you live outside of Kentucky but buy your winning ticket there, you're still responsible for the state income tax on lottery prizes.
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Remember to gamble responsibly
A responsible gambler is someone who:
- Establishes time and monetary limits before playing
- Only gambles with money they can afford to lose
- Never chase their losses
- Doesn’t gamble if they’re upset, angry, or depressed
If you or someone you know is struggling with gambling addiction, call the National Gambling Helpline at 1-800-522-4700 or visit the National Council on Problem Gambling online.
In other news, a lottery participant secured a substantial $100,000 prize, yet ultimately received only a fraction of the winnings.
And Virginia Powerball players have been warned to check their tickets to claim a $50,000 prize.
