Mega Millions jackpots are paid either over 26 years or a single lump sum payment, called Cash Option.
When someone wins the jackpot, Virginia Lottery officials invest the jackpot prize pool amount in U.S. Treasury bonds to secure an annual payment stream called an annuity.
If a jackpot winner chooses Cash Option, the Lottery sells the U.S. Treasury bonds. The winner receives all proceeds of this sale, roughly half of the advertised annuitized jackpot. Winners make this choice when they claim their jackpot prize. Winnings are taxable under either payment method.
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