The Illinois Lottery announced Wednesday that weeks after buying the winning ticket, the pair finally won the $1.34 billion Mega Millions jackpot, the third-largest jackpot in U.S. history.
The two winners were partners who agreed to split the winnings evenly before the winning ticket was purchased at a highway gas station outside Chicago. Lottery officials said they wished to remain anonymous, saying only that they were “on the moon” to win the jackpot.
Despite winning nearly two months ago, the winner has been working with legal and financial advisors to support the claims process. Instead of receiving the full “advertised” amount as 30 annual payments over 29 years, they opted to reduce the one-time payment at a “current market value” of $780.5 million.
Despite reducing payment and up-front tax costs, lump sum payments are the most common payment method. Shark Tank investor Kevin O’Leary also recommends it: “More money up front means more money to invest and grow over time,” he said.
After taxes, the total payout for the two winners is about $453 million, or $250 million each.
That’s because with the one-time payment option, a $780.5 million payout would be subject to 37% federal income tax, the top rate for the highest earners. Illinois’ 4.95% state tax will also apply to the total winnings, saving another $38.6 million.
According to MegaMillions.com, the odds of winning the Mega Millions jackpot are 1 in 302.5 million.
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