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How much money Mega Millions jackpot winners take home after taxes

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Weeks after purchasing the winning ticket, two people have finally claimed the $1.34 billion Mega Millions jackpot, the third-largest in US history, the Illinois Lottery announced Wednesday.

The two winners are a partnership, having agreed to split the prize before the winning ticket was purchased at a Speedway gas station outside Chicago. They wish to remain anonymous, only to say that they were “over the moon” about winning the jackpot, lottery officials say.

Despite winning the prize nearly two months ago, the winners have been working with legal and financial advisors to support the claim process. They opted to take a reduced lump sum payment at its “current market value” of $780.5 million, rather than receiving the full “advertised” amount as 30 annualized payments over 29 years.

Despite the reduced payout and upfront tax costs, a lump sum payment is the most commonly chosen payout. It’s also recommended by “Shark Tank” investor Kevin O’Leary: “More money up front means more money to invest and grow” over time, he says.

After taxes, the total payout comes to about $453 million between the two winners, or $250 million each.

That’s because with the lump sum option, the $780.5 million payout would be subject to a 37% federal income tax, the highest bracket for top earners. An Illinois state tax of 4.95% would also be applied to the total winnings, which shaves off another $38.6 million.

The odds of winning the Mega Millions jackpot are 1 in 302.5 million, according to MegaMillions.com.

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Disclosure: CNBC owns the exclusive off-network cable rights to “Shark Tank.”

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