Lottery Annuity Payment Schedule: 30 Checks Worked Out

A lottery annuity pays a Mega Millions or Powerball jackpot as 30 payments: one straight away, then one a year for 29 years, with each Mega Millions payment 5% bigger than the one before. To build the schedule, divide the advertised jackpot by the sum of those 30 growth steps to get the first check, then grow it 5% a year. Federal withholding of 24% comes off each payment, so the check that actually lands is about three quarters of the gross line.

That is the whole trick. The rest of this page does the arithmetic on a round number, shows where the official rule texts disagree, and sets the yearly checks next to the lump sum.

How to calculate lottery annuity payments

You calculate lottery annuity payments from the game's own rule: 30 payments, the first paid immediately, each later one 5% larger than the last. Because the payments grow, the first check is the smallest and the final one is the largest.

The method, step by step:

1. Add up the growth steps. Counting the first payment as 1, the second as 1.05, the third as 1.05 times 1.05 and so on to the 30th, the steps sum to about 66.44.
2. Divide the advertised annuity jackpot by 66.44. That is payment one.
3. Multiply by 1.05 for every year that follows.
4. Take 24% off each gross payment for federal regular gambling withholding.

A lottery annuity payment schedule calculator does exactly this, nothing more mysterious. Here it is for a made-up $100 million advertised jackpot under the Mega Millions annuity rules, as of October 2026:

The 30th check is about 4.12 times the first. Across all 30 payments the gross adds back up to the advertised $100 million, and after 24% withholding about $76 million reaches you before state tax and before your final federal return settles the real bill.

Two honest caveats on that last column. Withholding is a prepayment, not the tax itself: the IRS calls the 24% figure regular gambling withholding, and what you owe for the year is worked out on your return, which can land above or below it. State income tax depends on where you live and is not in the table at all.

What is the payout schedule for lottery annuities?

The payout schedule for the two big US multistate jackpots is 30 payments over 29 years: one immediately, then one each year. Mega Millions spells out that each payment is 5% bigger than the previous one, and Powerball describes 30 graduated payments over 29 years.

Why 30 payments but only 29 years? The first check is paid at once, so the 30th lands 29 years after it, not 30.

Not every rule text describes rising payments. Pennsylvania's Powerball rule text says annuitized prizes are paid in 30 annual payments, the first in cash, followed by 29 equal annual payments funded by the annuity. The sources disagree on the shape of the schedule, so for a current jackpot read the game's own page and your claim paperwork, which describe the graduated version. The equal shape is still a useful comparison:

The graduated schedule starts lower and finishes far higher. Payment 18 is the first one where the growing check, at about $3,449,816, passes the flat $3,333,333.

Lump sum versus annuity on one page

The other choice on the claim form is cash. Mega Millions describes the cash option as all the cash in the jackpot prize pool, paid in one go. The advertised annuity number is the sum of 30 growing payments, so it is the bigger headline, but it is the same prize in a different shape.

Which shape suits a winner is a question for an accountant and a tax adviser, not a table. The table only makes sure the comparison starts from the right numbers.

How is the Powerball annuity paid out?

Powerball pays the annuity as 30 graduated payments over 29 years, and jackpot winners can choose that or a lump-sum payment, according to the Powerball prize chart terms as of October 2026. The first payment comes at once and the rest follow yearly.

The Powerball chart says the payments are graduated but the wording we cite does not state the yearly step. The 5% figure in the worked example comes from the Mega Millions rule, so if you are running the schedule for a Powerball prize, confirm the step on the claim documents before you trust the column. The method in the steps above stays the same; only the growth figure would change.

Taxes work the same way for both games. The IRS instructions for Form W-2G, revised January 2026, say lottery winnings are withheld at 24% when the winnings minus the wager are more than $5,000. The test runs on the net figure, the prize minus what the ticket cost, not the gross prize. For a jackpot annuity that distinction never matters in practice, because every payment clears the $5,000 line by miles, so every payment carries the withholding.

A last numerate note: none of this changes the odds of hitting the jackpot in the first place. The schedule is the easy part.

Your odds questions

How often do lottery winners get annuity payments?

Once a year. The first payment arrives straight away, then one payment lands each year after it until all 30 are paid, which takes 29 years from the first check.

How much would a $2 billion annuity jackpot pay each year?

Using the Mega Millions rule of 5% growth, the first payment would be about $30,102,870 before tax and the 30th about $123,907,495. After 24% federal withholding the first check comes to roughly $22,878,181. State tax, if any, comes on top.

Is federal tax withheld from every annuity payment?

Lottery winnings minus the wager above $5,000 fall under the IRS 24% regular gambling withholding, and each jackpot annuity payment is far above that line. Withholding is a prepayment, so the final federal bill on your return can differ.

Is the lump sum the same amount as the advertised annuity?

No. The Mega Millions cash option equals all the cash in the jackpot prize pool, while the advertised annuity figure is the total of 30 payments spread across 29 years. They describe the same prize in two shapes.

Official sources

• Mega Millions, Mega Millions How to Play, accessed October 2026
• Powerball, Powerball Prize Chart, accessed October 2026
• Pennsylvania Code via Cornell LII, 61 Pa. Code 871.22 Changes to Powerball, accessed October 2026
• Internal Revenue Service, Instructions for Forms W-2G and 5754, January 2026