ialottery blog

Truth or Myth: The Cash Option Is The Jackpot’s Annuity Amount Minus Taxes

Let’s test your lottery know-how with a jackpot-related question! Truth vs. Myth: The cash option is the annuity amount of the jackpot minus taxes.

That’s a myth.

The cash option is NOT the annuity amount minus taxes. Here’s why.

When you win the jackpot in a game like Powerball® or Mega Millions®, you have two options for how you’ll receive your winnings: cash or annuity.

If you choose the annuity option, you’ll receive 30 payments over 29 years that add up to the annuity amount of the jackpot. The first payment is made when you claim the jackpot and the 29 other payments are made on that same date each year.

To achieve the annuity amount of the jackpot, the lottery invests in securities with the cash in the jackpot from the sale of tickets in the game. The initial amount of money invested plus all the interest generated over the 29 years of payments adds up to the annuity total of the jackpot.

Withholdings are applied to each annual payment that you receive. And if you die before receiving your final jackpot payment, the money goes into your estate. The lottery will then make any remaining payments according to the terms of your estate or as directed by the court.

If you choose the cash option, you’ll receive a one-time payment of the cash in the jackpot from the sale of tickets. You won’t receive any interest over time because the money is not invested. You took the lump-sum cash instead.

Another way of putting it is that the “rest of the money” doesn’t exist in that scenario. Withholdings are applied to the entire amount of the lump-sum jackpot payment.

So to recap: Annuity = cash + interest. Lump-sum = cash only.

Whether you play the lottery or not, we want everyone to have an accurate understanding of how the lottery works. This Truth or Myth series is part of that effort.

Pball Jackpot Raised To Est. $825 Million For Tomorrow Night’s Drawing

The Powerball® jackpot has been raised to an estimated $825 million annuity, $410.2 million cash option, for tomorrow night’s drawing. That’s up from yesterday’s figures, but it’s still the 2nd largest jackpot in the 30-year history of the Powerball game and the 5th largest lottery prize ever offered in North America.

When the jackpot reaches this level, it becomes harder to predict the grand-prize estimate for the next drawing. Stronger sales drive the jackpot higher and can lead to the revisions of the prize estimate before the next drawing, as has occurred this past week.

Details About Cash vs. Annuity – And Taxes

There are misconceptions out there about cash vs. annuity and what that means. The cash option is NOT the annuity amount minus taxes. Here are the actual details involved:

If a jackpot winner were to choose the annuity option for tomorrow’s big prize (currently an estimated $825 million), they would receive 30 payments over 29 years adding up to the annuity total.

The cash on hand in the jackpot pool from the sale of tickets in the game is invested in securities, and the winner receives payments over time. The initial amount invested plus the interest generated over time by the investment adds up to the annuity amount of the jackpot. Withholdings are applied to each payment that the winner receives. If a winner were to pass away before receiving all their payments, the money would go into their estate. The lottery would make future payments as determined by the estate or the court.

If a jackpot winner were to choose the cash option for tomorrow prize (currently an estimated $410.2 million), they would receive the lump-sum amount in the jackpot pool from the sale of tickets in the game. There is no interest income involved in that scenario because the money isn’t invested. Another way of putting it is that the “rest of the money” does not exist in that instance. The winner receives the lump-sum amount in one payment, with withholdings applied to the entire amount.

Here in Iowa, 24 percent federal withholding applies to a jackpot prize along with 5 percent state withholding. Withholdings are automatically applied and can’t be modified or waived.

The withholdings are designed to cover the jackpot winner’s tax liability from claiming a large lottery prize. But the total taxes that the winner would owe depends upon their financial circumstances outside of winning the lottery.

In some instances, the withholding is not enough, in other instances, it’s too much. The details would be sorted out in the winner’s income-tax filing for the year. That’s one of the reasons the Iowa Lottery always encourages its winners to consult a lawyer or financial planner before they claim their prize.

Scammers Unfortunately Notice Big Jackpots, Too

Scam attempts have been at all-time highs in recent years, and while the criminals behind them run scams of all types, they turn their attention to lottery games when jackpots are high.

In the past week, the Iowa Lottery has heard from multiple Iowans who received suspicious text messages, emails, or social media contacts claiming that they were big lottery prize winners. Those contacted indeed had not won a prize – they had received a message from scammers attempting to con them.

When you win a Powerball prize, you notify the lottery that you are the winner, not the other way around. The Iowa Lottery has records about the winning ticket and where it was purchased, but the lottery does not know the winner’s identity until that person presents the ticket for payment.

The Iowa Lottery keeps security reminders as a permanent feature on its website to help consumers stay safe. You can find the lottery’s Player Security tips here.

Remember The Sales Cut-Off Time

The majority of tickets for a particular drawing are purchased on the day of the drawing. So, if you’re buying a Powerball ticket for tomorrow night s drawing, remember that there is a sales cut-off time involved. Here in Iowa, the sales cut-off is 8:59 p.m. on the night of the drawing.

If you buy a ticket after that, you’ll still have a valid play, it will just be for a future drawing and you won’t be in on that night’s big money.

The cut-off deadline is an automated procedure and can’t be pushed back.

Please Play Responsibly

And as always, the Iowa Lottery reminds everyone that it only takes one ticket to win. Please play responsibly.

The Jackpot’s Been Raised Again! And The Facts About Cash vs. Annuity

It’s gone up again! The estimated jackpot for tonight’s Mega Millions drawing now stands at an estimated $830 million annuity, $487.9 million cash option.

It’s now the 3rd-largest jackpot in Mega Millions history, and the 4th-largest jackpot ever offered in the United States. (The record jackpot in the Mega Millions game was $1.537 billion, won in October 2018 in South Carolina.)

When the jackpot reaches this level, it becomes harder to predict the estimate heading into the next drawing. Stronger sales mean the jackpot will go even higher, and that’s what happened this week! The initial jackpot estimate was raised yesterday, then raised again this morning. I think it’s safe to say a whole lot of people are dreaming about a big win.

With all the buzz, a lot of folks have reached out to us with questions about cash vs. annuity, and the tax implications of winning the jackpot. Here are details to clear up a few misconceptions we’ve heard:

1. The cash option is NOT the annuity amount minus taxes. They are separate amounts. Here’s why: If the player chooses the annuity option (currently estimated $830 million), they receive 30 payments over 29 years that add up to the annuity total. The cash on hand in the jackpot pool from the sale of tickets in the game is invested in securities, and the winner receives payments over time. The initial amount invested + the interest generated by the investment adds up to the total annuity amount. Withholdings are applied to each payment that the winners receives. If a winner passes away, the money goes into that person’s estate. The lottery will make future payments as determined by the estate or the court.

2. If the winner chooses the cash option (currently estimated $487.9 million), they receive the lump-sum amount in the jackpot pool from the sale of tickets in the game. There is no interest that is generated because the money is not invested. Another way of putting it is that the “rest of the money” does not exist in that scenario. The winner receives the lump-sum amount in one payment, with withholdings applied to that entire amount.

3. Here in Iowa, 24 percent federal withholding applies to a jackpot prize along with 5 percent state withholding. The federal withholding rate is universal across the country, but state withholding rates vary, so check with the lottery where you bought your ticket if you have questions about that. Withholdings are automatically applied before the payment is made to the winner. The amount can’t be changed or waived.

4. Withholdings are designed to cover the jackpot winner’s tax liability from winning a large lottery prize. However, the exact taxes that the winner will owe vary from person to person depending upon their individual financial circumstances outside of winning the lottery. In some instances, the withholding is not enough, in other instances, it’s too much. The details will be sorted out in your income taxes for the year. That is why we always encourage our winners to consult a lawyer or financial planner before they claim their prize. Have a plan. Know and understand the details that apply to you!

If you’re buying a Mega Millions ticket for tonight’s drawing, remember that there is a sales cut-off time. Here in Iowa, the sales cut-off is 8:59 p.m. on the night of the drawing. If you buy a ticket after that, you’ll still have a valid play, it will just be for a later drawing and you won’t be in on tonight’s big money. (And yes, there are people who wait too long and miss the cut-off. It’s an automated procedure and can’t be pushed back.)

And as always, remember that it only takes one ticket to win. Please play responsibly.

Player Mail: What Happens To My Winnings If I Die?

Here’s a question that just came our way that we’ll put in the “oldie-but-goodie” category because it’s something we’ve been asked a lot through the years. Maybe you’ve wondered about it, too: What happens to my winnings if I die?

Some people seem to worry that their lottery winnings will go away if they choose the annuity option and should pass away before the final payment has been made. But in fact, in that situation, the prize money goes into that person’s estate.

When we receive word that a winner receiving annuity payments has died, that information is documented in the winner’s file. The lottery then makes payments to those listed in the terms of the winner’s estate or as determined by a court order.

That Age-Old Debate: Cash vs. Annuity

 

This question came our way again this week! Cash vs. annuity is one of the most popular topics of discussion when it comes to lottery jackpots.

We explained the difference in this oldie-but-goodie video that was one of the first we posted on YouTube.

What Happens To My Prize Payments If A Game Ends?

A player reached out to us on Facebook with an interesting question about prize payments when a game ends. The player wondered what would happen if a winner chooses the annuity option to receive prize payments over time, but the game involved ends before the final payment has been made.

The quick answer is that the prize payments would continue just as they had always been scheduled. That’s because the annuity payments are tied to that particular prize and the money comes from ticket sales at the time the prize is won. Prizes awarded are always honored.

In fact, we’re still making annuity payments for Iowa Lottery prizes won years ago – and the games involved are no longer for sale.

And to answer another frequent question when it comes to annuity payments: If a winner should pass away before the final annuity payment for his/her prize has been made, the prize money goes into that person’s estate.

When we receive word that a winner receiving annuity payments has died, that information is documented in the winner’s file. The lottery then makes payments to those listed in the terms of the winner’s estate or as determined by a court order. The lottery doesn’t get the money back -- it will be paid out according to the plans that the winner has made.

Jackpots Continue To Grow, $1 Million Prize Won In Iowa

The jackpots in Powerball and Mega Millions are still on their big run, but two tickets in Iowa came within one number each of hitting Powerball’s big prize last night! A ticket purchased in Avoca in western Iowa won a $1 million prize, while a ticket purchased in Colfax in central Iowa won a $50,000 prize.

Last Night’s Results

Iowa Lottery players won more than 15,000 prizes ranging from $4 up to $1 million in last night’s Powerball drawing. The $1 million-winning ticket was purchased at the Wings America Travel Centre at 7005 N. Chestnut St. in Avoca. (The location is just off Interstate 80 at the Avoca exit.) That ticket matched the first five numbers but missed the Powerball. Wings America will receive a $1,000 bonus from the lottery for selling the winning ticket at one of its locations.

Another Iowa ticket matched four of the first five numbers and the Powerball to win a $50,000 prize. It was purchased at Kum & Go, 1200 N. Walnut St. in Colfax. 

The winning numbers in last night’s Powerball drawing were: 12-30-36-47-62 and Powerball 9. The Power Play® number was 4. No one won the jackpot, so the big prize has grown to an estimated $356 million annuity ($224 million lump-sum option) for Saturday’s drawing.

Historic, Simultaneous Big Jackpots    
 
This is the first time that the jackpots in Powerball and Mega Millions have simultaneously topped the $300 million mark. Powerball’s big prize now ranks No. 14 overall in that game, while the Mega Millions jackpot is currently ranked No. 6 on the list of the biggest prizes ever offered in that game. The Mega Millions jackpot is an estimated $382 million annuity ($238.3 million cash option) for Friday’s drawing.

The fact that both games are seeing big jackpots at the same time is extremely unusual, and it speaks to the unpredictable factor of lottery jackpots: You never know when the next big winner will hit.   

New First: Powerball & Mega Millions Jackpots Top $300 Million At Same Time

We joined other lotteries around the country in some research this week and it’s now been confirmed: This is the first time ever that the jackpots in Powerball® and Mega Millions® have topped the $300 million mark at the same time.

Powerball’s big prize is an estimated $307 million annuity ($193.2 million lump-sum option) for tonight’s drawing, while the Mega Millions jackpot is an estimated $382 million annuity ($238.3 million lump-sum option) for Friday. That ranks both jackpots in the Top 25 for each game.

The fact that both games are seeing big jackpots at the same time is extremely unusual, and it speaks to the unpredictable factor of lottery jackpots: You just never know when the next big winner will hit.   

Could One Person Win Both?

Is it possible for one person to win the jackpot in both games? The short answer is: Yes. But the odds of that occurring are long.

The odds of winning the jackpot in Mega Millions are about 1 in 258.9 million. The odds of winning the jackpot in Powerball are about 1 in 292.2 million. (Those figures represent the total number of combinations available to play in each game.) To calculate the odds of winning both jackpots, multiply 258.9 million by 292.2 million. There are a lot of zeroes involved! The odds of winning both jackpots are about 1 in 75 quadrillion (that’s 75,000,000,000,000,000).

Winning both jackpots is something fun to daydream about, but it’s perhaps the ultimate long shot. That’s why we emphasize responsible play. Have fun playing the lottery, but remember to play with your head, not over your head.

What’s Behind The Numbers?

Mega Millions and Powerball are both well known for their giant jackpots but before January 2010, they were sold by separate groups of lotteries. U.S. lottery directors reached an agreement back then that allowed both games to be sold by all states. When more states sell a particular game, there’s a bigger population base playing it. That in turn produces higher sales overall and helps the jackpot climb higher.

Time also is a factor. The jackpots in both games have been growing for several weeks. The Powerball jackpot was last won on June 10 with a ticket purchased in California. It’s been growing since that time to hit its current level. Players can buy tickets here in Iowa for tonight’s Powerball jackpot up until 8:59 p.m. The Mega Millions jackpot was last won in the drawing on April 28, also with a ticket purchased in California. Players can buy tickets in Iowa for the next Mega Millions drawing up until 8:59 p.m. Friday. Tickets purchased after those deadlines will be for an upcoming drawing and won’t have a shot at that night’s big prize.

Not The Biggest Jackpots Ever, However 

Mega Millions and Powerball have both seen jackpots much larger than their current amounts, but not at the same time. Powerball currently has the world record lottery jackpot: a prize of nearly $1.6 billion that was split in January 2016 by three tickets in California, Florida and Tennessee. The largest Mega Millions jackpot to date is a $656 million prize won in March 2012 by three tickets in Illinois, Kansas and Maryland.

Jackpot News Galore/Dueling Jackpots!

Aug. 9 update: Nobody hit the jackpot in last night's Mega Millions drawing, so the dueling jackpots are still ON! The Mega Millions jackpot now stands an estimated $382 million annuity ($238.3 million lump-sum option) for Friday's drawing. So now we'll wait to see what happens in tonight's Powerball drawing ...       

This week is the first time that the jackpots in Powerball® and Mega Millions® have both topped the $300 million mark at the same time since the games began to be sold by all U.S. lotteries seven years ago.
 
Prior to January 2010, the two games were sold by separate groups of lotteries. U.S. lottery directors reached an agreement back then that allowed both games to be sold by all states.

The jackpot for tonight’s Mega Millions drawing is an estimated $350 million annuity ($218.3 million cash option), while the Powerball jackpot for tomorrow night is an estimated $307 million annuity ($193.2 million cash option). That puts both jackpots in the Top 25 for each game.

The fact that both games are seeing big jackpots at the same time is unusual, and it speaks to the unpredictable nature of lottery jackpots: You just never know when the next big winner will hit!

Both jackpots have been growing for some time now. The Mega Millions jackpot was last won in the drawing on April 28 with a ticket purchased in California. It’s been growing since then to hit its current level. Remember that you can buy tickets here in Iowa for tonight’s Mega Millions drawing up until 8:59 p.m.

And the Powerball jackpot was last won on June 10 with a ticket purchased in California. You can buy tickets here in Iowa for tomorrow night’s Powerball jackpot up until 8:59 p.m. tomorrow.

If you buy tickets after those deadlines, they’ll be for a later, upcoming drawing.

Mega Millions and Powerball have both seen jackpots much larger than their current amounts, but not at the same time. Powerball currently has the world record for a lottery jackpot: a prize of nearly $1.6 billion that was split in January 2016 by three tickets in California, Florida and Tennessee. The largest Mega Millions jackpot to date is a $656 million prize won in March 212 by three tickets in Illinois, Kansas and Maryland. 

Iowa Lottery players have won eight Powerball jackpots so far. The biggest Powerball prize won to date in Iowa was a $241 million jackpot claimed in June 2012 by The Shipping 20, a group of co-workers from the Quaker Oats plant in Cedar Rapids. And while Iowa has seen several winners at the $1 million level in Mega Millions, we are still waiting for our first jackpot winner in that game here in Iowa.

Iowa Results Delayed For Thursday's Lucky For Life Drawing

The results of Thursday's Lucky for Life drawing are delayed on the Iowa Lottery's system statewide. The delay impacts only that lotto game and drawing for tickets purchased in Iowa; all other lottery tickets can be purchased, checked and cashed as usual at lottery terminals across the state.

We are working to address the issue and we anticipate being able to reach a resolution later today. If you have tickets from Thursday's drawing you should keep them so you can check them once the Iowa results have been finalized.

"We apologize for any inconvenience this delay may have caused," Iowa Lottery CEO Terry Rich said. "We are working to finalize our Iowa drawing results as quickly as we can."

Can A Group Choose Cash AND Annuity?

We’ve got some real planners here in Iowa! We’ve heard from a couple folks who tell us they are definitely planning to win the lottery as part of the group they buy tickets with, and they want to know if some members of the group can choose the lump-sum option for a jackpot prize while the rest of the members take the annuity option. The short answer is that it’s an either/or situation: The whole group needs to choose one option or the other.

 

When you win a jackpot, whether it’s with a ticket you bought on your own or as part of a group, we only issue one check for the winnings. There are a variety of security and financial rules in place requiring that to happen.

 

If you’re part of a group of 25, we don’t cut 25 checks, we just give you one check and the members of your group then divide up the money from there. The entire group has to decide on either the cash or annuity option before the prize is claimed.

 

And to ensure that one person isn’t stuck with all the liability for that taxable income, all members of the group sign an IRS Form 5754 so they’re listed for tax-reporting purposes. On the form, each person states how much of the prize they’re claiming.

 

We keep a list of tips about group play on our website. Click here to check them out.

Can Players Claim A Prize As A Group? Yes, But ...

Here’s a question we often get from folks who buy tickets together: Can a Iowa Lottery prize be paid to a group? The answer is yes, with some qualifiers.

A prize check can be written to an entity such as a trust or to a single individual. If someone is claiming a prize on behalf of a group, they’ll fill out the claim form in their own name, but will indicate on it that the prize is being split by a group. In addition, there is a federal tax form that will need to be filled out to show that the tax liability for the prize is being split by a group. That ensures that the winnings and the tax withheld are correctly allocated to each member of the group.

Only one check is issued by the lottery for each prize claimed. The person claiming the prize will need to split the winnings with the rest of the group after cashing or depositing the check. People have asked why we couldn’t write several different checks for one prize, but as you can imagine, accounting and security complications would abound in a situation like that.  

And if a jackpot prize with a lump-sum or annuity option is being claimed by a group, the decision as to how to claim the prize has to be made once for the entire group. That means everyone in the group takes the same option -- cash or annuity. (The group has 60 days from the date they claim to make that decision.) A few people couldn’t choose annuity payments while the rest of the group took cash. That again is for accounting and security reasons.

Two of our most recent group winners are shown here, by the way! Connie Waite of Cedar Rapids represented her group of friends calling themselves the Rumors 20 when she claimed a $150,000 Powerball prize in May. The group often hangs out at a bar and grill called Rumors in Cedar Rapids, so that’s where they came up with their name.   

And a group of 15 co-workers at a countertop manufacturing company in western Iowa just split a $9,000 Hot Lotto prize this month. They called themselves the VT Fabulous 15 for VT Industries in Sac City, where they work.

 

How Long DO Those Lucky For Life Prizes Really Last?

We’ve been watching some of the comments on social media about Lucky for Life^®, and there seems to be confusion about the length of time involved in the pay-out of the game’s top prizes.

Some of the confusion likely came about after our first big winner in the game chose the lump-sum payout option for his prize, which certainly was his prerogative. Let’s take a closer look at the larger prizes in Lucky for Life and how they work.

There are 10 prize levels in the Lucky for Life game, ranging from $3 up to $1,000 a day for life. The top two prize levels in the game are what get the most attention, because they’re for life, meaning that they last as long as you do.

You win the game’s top prize of $1,000 a day for life by matching all six winning numbers in one of its drawings. The game’s second prize level of $25,000 a year for life comes from matching the first five numbers but missing the Lucky Ball.

So, what does “for life” mean? It really does mean for life, but there are some qualifiers to that answer. The MINIMUM payment period for the game’s top two prize levels is 20 years. So, if you were to win one of those prizes at 55 but die at 70, you (and your estate) would still receive 20 years’ worth of payments. But let’s say you win the game’s top prize when you’re 35, you choose the annuity option and you live to be 85. In that instance, the payments would continue that entire time, for 50 years.

There is a lump-sum option for the top two prizes, should you want cash up front. The lump-sum option for the top prize is $5.75 million while the lump-sum option for the second prize is $390,000.

In March, Roy King of Sioux City won the game’s second prize of $25,000 a year for life. He chose to receive his prize as the lump-sum option, which may have blurred the lines a bit for some folks about the payout periods in the game.

We hope this explanation helps!

Here’s How Iowa Did Tonight …

The early details show that Iowa Lottery players won nearly 225,000 prizes in tonight’s world-record Powerball® jackpot drawing, and the game’s giant top prize ended up being even higher than the latest estimates leading into the drawing.

Strong sales nationwide pushed tonight’s jackpot to a world-record $1.586 billion annuity, or $983.6 million cash option. We’ll have full details tomorrow – including the locations where the big winning tickets were sold in Iowa and whether there was a jackpot winner anywhere in the country.

Here’s a first look at tonight’s drawing and our results here in Iowa.

The winning numbers in tonight’s Powerball jackpot drawing were: 4-8-19-27-34 and Powerball 10. The Power Play® number was 2.

A total of 224,656 Powerball plays purchased by Iowa Lottery players won prizes, including seven tickets that came within one number of having at least a share of the jackpot. One of those tickets won a $2 million prize. The ticket initially matched the first five numbers but missed the Powerball to win a $1 million prize, but the person who bought the ticket also added the Power Play to the purchase, which multiplied the prize to $2 million.

Six other Iowa tickets also were one number away from the jackpot, matching four of the first five numbers and the Powerball. Three of those tickets each won a $50,000 prize, while three others each won a prize of $100,000. The difference again was the Power Play option, with the $100,000-winning tickets having the Power Play added to them.

Over the past several days, it really has felt like we were all part of one big conversation. At the lottery, we extend huge thanks to our players and retailers for being of this shared moment. It’s been a busy time, but we’ve all had some fun and our joint efforts have made a difference right here at home by raising additional lottery proceeds for state causes.     

Lottery players here in Iowa bought more than $12 million in Powerball tickets for tonight’s drawing, including more than $6.2 million in tickets today alone. During today’s busiest stretch from about 5-6 p.m., Powerball tickets were selling at nearly $13,800 per minute in Iowa. However, the average Iowa Powerball purchase today was about $7, or three to four plays per ticket. We’re glad to see that people had fun playing and didn’t go overboard.

How do the sales figures for tonight’s drawing compare to those for Saturday’s drawing, when the jackpot had already set a U.S. record at $947.9 million? Iowa Lottery players bought more than $8.6 million in Powerball tickets for Saturday’s drawing, including more than $4.4 million in tickets that day alone. Sales peaked at about $7,900 per minute on Saturday. So, total sales for tonight’s world-record Powerball drawing were nearly 40 percent higher than those for the drawing just four days earlier. 

The odds of winning the jackpot in Powerball are about 1 in 292.2 million because there are about 292.2 million ways you can combine the numbers in the game to make a play. By tracking nationwide sales, lottery officials can estimate how many of all the possible combinations have been purchased for a particular drawing – something called the coverage rate. Nearly 89 percent of all the combinations were covered in tonight’s drawing.

Cash Vs. Annuity: What Happens To ‘The Rest Of The Money’?

With the Powerball jackpot topping the $200 million mark again, we’re hearing from more folks who are daydreaming about what would happen if they won. And they’re asking one of the most common questions we hear when it comes to the jackpot amount: Why is the cash option so much less than the annuity amount? And what happens to “the rest of the money” when the cash option is chosen?

We answered that question in the video above, which has nearly 75,000 views – and climbing – on YouTube. Click on the link to learn all about it.

 

What You Need To Know When You Win The Lottery

 

We’ve been working for the past few months to put together an informational kit we’ll give to our biggest winners when they claim their lottery prizes. It’s always a very exciting time, but tumultuous, too, I’m sure.

Sometimes I can tell it’s all going by in a blur for them. I wonder if in all the excitement they’ll remember anything we talked about while they were here at lottery headquarters claiming their winnings. So, we’ve put together a packet that they can take with them and review once the initial buzz has passed.

A central part of that kit is the video above, which walks you through the prize-claim process and what to expect when you claim a big prize. Once we had the video done, we realized there wasn’t a reason for us to hold it back exclusively for our biggest winners. Maybe you’ve wondered about the prize-claim process, too, and what you should think about if big lottery luck comes your way. So click on the video above to learn all about it!

My Office Pool Has This Burning Question…

It appears that at least some of our players are serious about planning ahead – and they very clearly intend to win the lottery! I recently got a telephone call from a group of co-workers who play the lottery in an office pool. And they’d gotten into a big debate about what would happen when the time came for them to claim a big prize.

Some members of the group thought they would want to claim the prize as the cash option while others said they might want to choose annuitized payments over time. So they wanted to know: Could they have it both ways?

The short answer is no, but there are more details involved than that. When a prize is claimed here at the Iowa Lottery, we write just one check to one person or entity. There are a variety of security and financial rules in place requiring that to happen. So, if you’re claiming a prize as part of a group, you can claim it as a trust, or the check can be written to just one particular person in your group. The entire group has to decide on the cash or annuity option before the prize is claimed.

A tax form is filled out at the time – Federal Form 5754 – that details how the prize is being divided and identifies the people who are claiming it. It lists each of the winners along with their address and tax identification information to ensure that the prize and taxes withheld are allocated correctly to each group member. It’s a pretty simple process, and we have that paperwork here at the lottery, or if you want to fill it out in advance, we have links to the forms on our website.

Check out the Frequently Asked Questions on our website as well for more info. about claiming a lottery prize.

Good luck to your group that plays the lottery! And yes, we’ll make it a big celebration when you come in to claim that big prize!

The Top 5 Things We Hear …

There are some topics that come up again and again in the lottery world, so I’ve put together a list of the Top 5 for you today.

The undisputed No. 1 is the whole cash vs. annuity argument -- Which is chosen more often? Which is better? What happens to “the rest of the money” when you choose the cash option? We answer all that and more in this video.

No. 2 on the list has got to be the urban legend that “no one from here ever wins.” Check out what we have to say about that here.

No. 3 focuses on easy picks vs. play slips in our lotto games. Which type of play is made more often? Are you more likely to win with one or the other? We answer that here.

No. 4 is a question about lottery proceeds, and specifically, where that money goes here in Iowa. Click here to find out.    

And No. 5 on the list is the question asking whether you can remain anonymous in Iowa when you claim a lottery prize. The short answer is no, but we give the complete details here.