Connecticut Tax Bite on Powerball Big Winner Would Be 15th Highest in US
/If you happen to win a $1.5 billion Powerball lottery jackpot, you’d be well advised to be a resident of one of nine states that do not tax such winnings. Connecticut is not among them.
Connecticut’s take on such a jackpot would be 15th highest in the nation, among the states that do tax such winnings at various income tax rates. An analysis by Bloomberg found that the amount of state income taxes owed would be highest for residents of Oregon, Minnesota, Iowa, New Jersey, Washington D.C., Vermont, New York, Maine and Wisconsin.
Connecticut residents would need to pay the state $62.3 million, which, when combined with the federal tax bite, would leave the Powerball winner with just under $500 million of the $1.5 billion jackpot.
According to the analysis, the IRS takes 25 percent off the top. The winner will then have to pay the federal government an additional 14.6 percent at tax time, for a total of 39.6 percent–the maximum individual tax rate. That means the most a winner can hope to take home is $561.7 million.
Then the home state – with the exception of the nine states that don't go after such winnings – take their share, ranging from $92.1 million for an Oregon resident to $29.9 million for a North Dakota resident. Connecticut is approximately in the middle of the pack.
States can also receive a revenue boost when there isn't a Powerball winner for quite awhile, as happened between November 2015 and January 2016. As the jackpot grew each week, sales of tickets increased. According to published reports, the state of Connecticut received more than $20 million out of the $50.1 million in Powerball tickets sold.
