If the Mega Millions winner takes the lump sum, right away nearly a quarter of the prize is withheld for federal taxes. And they're not off the hook yet. WASHINGTON — After months without a grand prize winner, someone in New Jersey beat the odds Tuesday night and won a $1.13 billion Mega Millions jackpot. It was the game's fifth largest jackpot ever and was purchased at a wine and liquor store on the Jersey Shore, state lottery officials said. That big winner now has a hefty tax bill waiting for them. That's because lottery winnings are treated as income by the federal government and most states, so the jackpots are subject to state and federal income taxes. However, there are 13 states that do not collect additional taxes on residents' lottery winnings. How much will the Mega Millions winner actually get? When a grand prize winner comes forward, they must first decide whether they want to receive theirwinnings in a 30-year annuity, or receive their winnings in a lump sum of cash. If t...
