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Michigan Player Bags $842m Powerball Prize on New Year’s Day

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A single ticket sold in Michigan has hit the first big Powerball lottery jackpot of the year, $842.4 million on Monday night.

The prize also stands as the fifth largest in Powerball history and the second largest win in Michigan, only behind a $1.05 billion Mega Millions Jackpot won in 2021.

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The winning ticket matched all six numbers drawn on Monday, 12, 21, 42, 44, 49, including the red Powerball 1. The power play multiplier was 3x. According to the Michigan Lottery, the lucky ticket was purchased at the Food Castle in Grand Blanc, Michigan.

The ticket holder now faces a choice between receiving an annuitized prize of $842.4 million spread over 30 annual payments that increase by five percent every year or a pre-tax lump sum of $425.2 million.

If the winner chooses the cash option, the winnings will reduce to $323.15 million after a required 24% federal tax withholding. Based on the winner's taxable income, they might encounter a federal marginal rate of up to 37%, further reducing their take-home amount to $267.87 million.

Since the ticket was sold in Michigan, 4.25% of the total winnings will be withheld as state income tax, resulting in an additional deduction of $18 million.

Despite the significant reductions, the cash prize is the most popular option amongst Powerball lottery winners. According to Powerball.net, which offers independent Powerball news, of the over 240 Powerball wins since 2003, the annuity method of receiving the full jackpot has only been chosen about five times.

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