By CNN Staff
(CNN) — The second Powerball ticket holder in last month’s record jackpot has come forward to claim winnings worth nearly $200 million before taxes, the Arizona Lottery said Friday.
The $587.6 million jackpot from a drawing last month had a cash option of $384.7 million before taxes.
The Arizona winner has opted to take cash, $192.5 million, before taxes. Details were to be announced at a news conference at 5 p.m., but the winner was not planning to attend. The winner’s name will be made public, though, under rules of the lottery in Arizona.
Two winners from Missouri claimed their half of the jackpot on November 30.
The prize is considered income by the IRS, meaning that the highest federal tax rate of 35% will apply. Each winner would therefore owe $67 million to the IRS, said Mark Luscombe, principal analyst at tax research firm CCH, in an interview last month.
State taxes will also apply.
In Arizona, a resident who has the winning ticket will be charged a 5% tax on the prize money. If a non-resident bought the winning ticket, a 6% rate will apply. The resulting tax bill will be either $10 million or $11 million, according to CCH.
Missouri charges residents and non-residents a 4% tax, making the tax liability there nearly $8 million.
Taking both state and federal taxes into consideration means the Arizona winner would owe up to $78 million in taxes and take home $114 million. The Missouri winner’s tax bill would total about $75 million, leaving a take of $117.5 million.
However, in either case, the amount paid in state taxes could likely be deducted on the winners’ federal tax returns, lowering the overall tax liability slightly.