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The US Sun
Lottery player scores $3 million top prize from a $10 scratch-off but immediately had to give up over half the money
By Maya Lanzone,
5 days ago
LUCK was on the side of a lottery player from New York, who scored a $3 million top prize on a scratch-off ticket.
However, the player didn’t get to keep all the cash and was immediately forced to say goodbye to over half the prize.
A New York lottery player won $3 million from a $10 scratch-off game Getty Lottery players typically don’t get to keep the entire advertised prize Getty
Anthony Gallo from Batavia, New York – about 35 miles from Rochester – scored big on a $10 scratch-off ticket.
The lottery player won $3 million from the New York Lottery’s Triple Jackpot 777 game.
The New Yorker bought the lucky ticket at the Speedway on West Main Street in Batavia.
Although Gallo’s prize was listed at $3 million, he was forced to give up a chunk of the money.
The winner opted for a lump sum , choosing to receive the prize as one large payment.
When players select the lump sum, a set amount is automatically deducted.
Both federal and state taxes are also deducted, leaving lottery winners with much less than the advertised prize.
In Gallo’s case, he received $1,386,630 after the required withholdings.
Had he chosen the annuity option, he would have received the full advertised prize amount, but it would have been distributed in a series of payments over a specified period.
Annuity prizes are also subjected to state and federal taxes.
MORE MONEY
The larger the prize won, the more money is lost to taxes and automatic deductions.
Identified by lottery officials as Jeanne, the lucky player bought a winning $50 Ohio Lottery 50th Anniversary scratch-off.
“I scratched it off and none of the numbers matched because I don’t scratch all the numbers. I scratched like maybe 10 or 12 and I usually know if it’s a winner or not. So, nothing matched, and I scanned it and it said, ‘Winner, see clerk,’” said the winner.
She returned to the gas station where she bought the ticket and a shocked employee informed her she’d won $600,000 a year for 25 years.
“I was speechless,” Jeanne said. “What I kept thinking is I’m just going to wake up. It’s not real,” said Jeanne.
Lottery winnings: lump sum or annuity?
Players who win big on lottery tickets typically have a choice to make: lump sum or annuity?
The two payout methods can impact how much money you get from your prize.
Annuities pay out slowly in increments, often over 30 years.
Lump sums pay all at once but in a smaller amount, as taxes are withheld in one go. That means 24% of your prize goes to Uncle Sam right away. Many states tax winnings as well.
Annuities can provide winners time to set up the financial infrastructure required to take in a life-changing amount of money, but lump sums have the benefit of being taxed only once.
Inflation is also worth considering when making a choice, as payouts do not adjust with the value of a dollar. That means that you’ll likely be getting less valuable money towards the end of an annuity.
Each state and game pays out prizes differently, so it’s best to check with your state’s lottery to confirm payment policies. A financial advisor can also help you weigh the pros and cons of each option.
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