The Powerball Winners Won't Be Billionaires

Wednesday night's Powerball drawing offered a staggering, record-shattering jackpot of $1.5 billion — the largest prize in lottery history. The hefty sum drew a heavy influx of people to lotto stands with hopes of becoming billionaires in mind. In the end, three jackpot winners were announced, each one in a different state. In the event that more than one person matches the winning numbers, the jackpot must be split. So how much will the three Powerball winners ultimately win? After dividing the total three ways and then applying federal taxes, it looks like the Powerball jackpot winners will be nowhere near billionaire status.

Assuming that all three of the winners choose to take the lump sum payment, then that $1.5 billion total is immediately reduced to $930 million. Then, there are federal taxes. The IRS taxes lottery winnings like regular income, so if you win hundreds of millions of dollars, you'll suddenly find yourself in the highest tax bracket. That means you'll be taxed at a rate of 39.6 percent, which will take another $368 million out of the $930 million. In the end, the jackpot is $562 million — less than half of that dazzling number which lured you to play in the first place. And when you split that three ways, each winner walks away with $187 million. So billionaires they are not.

But there is a bit of good news for the winners (you know, besides winning the Powerball). Their winnings could have been taxed even further. Depending on where you live, your state's income taxes could take yet another significant chunk out of your winnings. However, the three winners of Wednesday's Powerball happen to each live in a state which does not tax lottery winnings.

The winning tickets were sold in California, Florida, and Tennessee. A map created by Bloomberg Business shows that the final $562 million jackpot would be untouched in these three states, since Florida and Tennessee don't impose state income taxes, and California exempts lottery winnings from its income taxes. Only two other states have the same exemption: Pennsylvania and Delaware.

The winning numbers in Wednesday night's drawing were 4, 8, 19, 27, and 34, with a Powerball of 10. A spokesperson for the California Lottery confirmed that a winning ticket was sold at a 7-Eleven in Chino Hills.

None of the three winners' identities have been revealed as of press time.