A SCRATCH-off player has won $1 million but had to give up over half the prize.
While many lottery fans play draw games like the Powerball or Mega Millions, scratch-off games can also lead to huge payouts.
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Kenneth Lynch from Walden, New York, bought a Cash X20 ticket for $5 in February.
He picked up his million-dollar winning ticket from Stewart’s Shops in Newburgh, about 60 miles north of New York City.
Lynch didn’t get to keep his entire lotto prize though.
This fate stemmed from his decision and other factors out of his control.
CASH SLASHED
Major lottery winners must withhold a chunk of their prizes for state and federal taxes.
New York has one of the biggest tax deductions compared to other states.
Lynch had to fork over 8.82% of his prize for state tax withholdings and 24% for federal tax withholdings.
He also lost a portion of his prize when he chose to claim it as a one-time lump sum payment.
According to New York Lottery officials, his other choice would have been to claim the prize in annual installments over 20 years.
His final prize after required withholdings was $494,760, meaning he gave up $505,240.
UNCLAIMED PRIZE
Lottery players in Missouri should check tickets as they might be a winner on a draw game.
One lucky winner matched all five white balls — 26, 27, 43, 50, and 56, for a Cash4Life April 2 drawing.
They bought their ticket for $2 from a Deirberg convenience store in St. Charles County.
If the winner comes forward, they have two choices for claiming their prize.
Lottery prizes: Lump sum vs Annuity
Lottery winners throughout the US must make a tough decision about how they want to claim their prizes.
What is a lump sum payment?
- Lottery winners can accept a one-time cash payout.
- Although a winner would lose a chunk of their payout to taxes, they would likely lose more over time with annual payouts.
What are annual payments?
- Installments are paid out as one immediate payment followed by a series of annual payments.
- This guarantees money to come in for years or even decades, but some winners worry tax rates may increase over time.
“To invest better you need to not only choose a good, low-cost, diversified portfolio,” said Charles Weeks, the founding partner of Barrister, via USA Today.
“You will also need to make sure you control your emotions in good markets and bad.”
They can get $1,000 a week for life totaling $52,000 annually.
Their other choice is to take the $1 million lump-sum payment subject to tax deductions.
The Missouri Lottery gives players 180 days from the draw date to claim their prize.
That means the Cash4Life winner must come forward no later than September 29.
The U.S. Sun has more stories on lottery winners and unclaimed prizes.
One couple who thought they won a $1 million Powerball prize didn’t realize they won $2 million.
Meanwhile, the winner of a historic $1.3 billion Powerball prize claimed the loot days after their victory.
Read our lottery live blog for the very latest news and updates…
Remember to gamble responsibly
A responsible gambler is someone who:
- Establishes time and monetary limits before playing
- Only gambles with money they can afford to lose
- Never chase their losses
- Doesn’t gamble if they’re upset, angry, or depressed
If you or someone you know is struggling with gambling addiction, call the National Gambling Helpline at 1-800-522-4700 or visit the National Council on Problem Gambling online.