Powerball a jackpot for winner and taxman

The $1.5 billion Powerball jackpot may create a tax windfall for a lucky state.

The drawing for the multi-state lottery on Wednesday night could result in the largest-ever jackpot, changing the life of whoever has the correct numbers.

{mosads}If a winning number is picked, the winner could receive $1.5 billion in payments over 30 years or $930 million if the winner requests a lump sum.

Either way, federal and state governments could be in for some revenue.

The federal government withholds 25 percent from lottery winnings, and the winner would have to pay the remaining taxes owed when he or she files taxes. The top federal tax rate for individuals is currently 39.6 percent.

A real lucky winner would live in a state that is participating in the lottery and lacks an income tax: Florida, Texas, Wyoming, South Dakota and Washington. New Hampshire and Tennessee also don’t tax income from wages or lottery payments, while California and Pennsylvania exempt lottery winnings from taxes.

Alaska, Nevada and Wyoming are no-income tax states, but they aren’t part of the Powerball.

A Powerball winner would keep the least amount of the money if he or she is an Oregonian, according to an analysis by Bloomberg.

Bloomberg estimated that a Powerball winner in a state that doesn’t tax lottery winnings would keep about $562 million after taxes if he or she took the lump sum.

It estimated an Oregon resident would only keep about $470 million.

The New York Times reports that New York is the state that brings in the most lottery revenue. The Empire State brought in $9.2 billion in 2014, with $3.1 billion of that amount going to state programs. After New York, Florida, California and Massachusetts had the most lottery revenue.

Many states use at least some of their lottery revenue for education, while others transfer a lot of the revenue to their general funds, the Times reported.

The District of Columbia is among the jurisdictions that transfers lottery revenue to its general fund, according to the D.C. Lottery website. The District got $54.9 million from the lottery in fiscal 2014, a year when the city had revenue of more than $7 billion, according to the Washington Business Journal.

Current and former members of Congress count themselves as lottery winners. 

House Majority Leader Kevin McCarthy (R-Calif.), won $5,000 in the lottery when he was in college. 

Rep. Jim Sensenbrenner (R-Wis.) has won the lottery multiple times, including $250,000 in 1997.

And then-Sen. Judd Gregg (R-N.H.) won more than $850,000 from the Powerball lottery in 2005.