Mega Millions jackpot hits $541M: What's the tax bill?

(NEXSTAR) — Without a Black Friday winner, the Mega Millions jackpot has grown to an estimated $541 million ahead of the next drawing. While the win would be nearly historic, the amount that the winner would take home would be much smaller.

Mega Millions players have been watching the jackpot grow since September when a ticket sold in Texas landed an $800 million jackpot, the seventh-largest payout in the game's history.

At $541 million, the current jackpot ranks as the eleventh-largest, just $2 million behind a 2018 prize won in California. It's also $9 million shy of the tenth-largest in game history, a spot currently held by a $552 million jackpot won in Illinois in June.

Should you win, your payout could be vastly smaller than the advertised size.

Large lottery prizes, like this Mega Millions jackpot, are subject to taxes, which vary depending on where you live. Whether you opt for the annuitized or cash prize (an estimated $258.4 million for Tuesday's drawing), your local lottery is required to withhold 24% in federal taxes. With additional withholdings, about 37% of your prize money goes to taxes.

In states that do not have a local lottery tax, winners could take home about $342.1 million after all 30 of the annuitized payments, or roughly $162.8 million in cash, an analysis by USA Mega shows. That means you would see about $198.9 million or $95.6 million going to taxes, respectively.

Let's say you live in North Dakota, where the state lottery withholds 2.9% on prizes over $5,000, the lowest rate in the nation. After taxes, your annuitized payout would be about $326.4 million, the highest possible payout after states without local lottery taxes. If you opted for the cash prize, it would be about $155.3 million, based on USA Mega's analysis.

In New York, which withholds the most when it comes to lottery prizes, USA Mega found the total payout for the annuitized option would be about $283 million. The cash payout would be far lower at $134.7 million.

That can, of course, change. The Mega Millions jackpot may grow before the drawing, set for 11 p.m. ET on Tuesday. It may also be won by more than one ticket, which would leave the winners splitting the prize money evenly among themselves.

If you do win the jackpot, experts recommend keeping it a secret for as long as possible while moving quickly to assemble a team of experts, including an attorney, a tax advisor, and a financial advisor. In addition to keeping the ticket secure, experts also recommend signing the back of it.

Mega Millions tickets are $2 each and sold in 45 states, the District of Columbia, and the U.S. Virgin Islands. In addition to Tuesdays, drawings are held on Fridays at 11 p.m. ET. Players have a 1 in 24 chance of winning any Mega Millions prize.