Cancer patient Cheng Saephan, 46, confirms he & 2 other winners will already lose a third of $1.3b Powerball jackpot | 1MND9K5 | 2024-04-30 17:08:01
Cancer patient Cheng Saephan, 46, confirms he & 2 other winners will already lose a third of $1.3b Powerball jackpot | 1MND9K5 | 2024-04-30 17:08:01
THE latest US Powerball winners may have been handed a $1.3 billion check on Monday, but the trio is due to lose the majority of their cash to taxes and their decision to receive a lump sum prize.
Cheng Saephan, 46, was revealed as the winner of the historic $1.3billion Powerball jackpot drawing on April 7 earlier today.
He and his 37-year-old wife, Duanpen, are taking half the prize money, while the rest is going to a friend, 55 -year-old Laiza Liem Chao.
Chao had chipped in $100 to buy a batch of 20 tickets with the couple.
The trio elected to take a lump sum payment rather than have it paid out over a 30-year annuity, which means they are awarded the cash value of the jackpot.
The cash value of the $1.3billion jackpot is $621million according to the Oregon Lottery Commission.
However, because they are all residents of Portland, Oregon, the amount they will actually walk away with after federal and state taxes is $422 million.
Since lottery winnings are treated as income by the federal government and many states as well, the jackpots are subject to state and federal income tax.
Federal taxes for lottery winners are 24% for any prize winnings over $5,000, which lottery agencies automatically withhold, according to TurboTax.
Electing to take the lump sum, which is what is most commonly chosen by prize winners, often also puts them in a higher tax bracket of 37%.
If the earnings put the winner in higher tax bracket, they owe the difference between the withholding amount and their total tax.
The percentage of a person's lottery winnings that is withheld varies by state.
In Oregon, the amount withheld is 8%, which is one of the highest in the country, after New York, Maryland, and Washington D.C., according to the Tax Foundation, an international think tank that researches government taxes.
However, there are 13 states that do not collect additional taxes on lottery winnings.
Those states include Alabama, Alaska, California, Florida, Hawaii, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Utah, Washington and Wyoming.
If a winner takes their winnings in an annuity payment plan, they may not yet fall in the highest tax bracket each year, dependent on the size of the prize and their other income.
They also receive interest on the jackpot, which means overall they would get to retain more of their winnings.
Cheng Saephan revealed in a press conference on Monday that he intends to use his winnings to help him in his fight against cancer.
"I am able to provide for my family and my health," Saephan said.
"My life has been changed. Now I can bless my family and hire a good doctor for myself.
"How am I going to have time to spend all of this money?"
Saephan said he will also use the money to buy his dream house for his family.
But he doesn't plan on moving out of Oregon.
"I love Oregon. I've been here 30 years, so I'm not going to move out. I'm going to stay here," he said.
The dad of two purchased the ticket at a Plaid Pantry store in northeast Portland on April 6.
The winning tickets were made up of the numbers 22, 27, 44, 52, 69, and the red Powerball 9.
Saephan's winning ticket was the eighth-largest jackpot in US history.
Millions dream of winning the lottery and finding fame and fortune. These are the biggest winners in US lottery history.
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