This California man still hasn’t received his $44M prize months after winning the lottery — says the process is actually ‘really horrible’ for a winner

How much does a lottery winner actually receive?

Some people may assume that winning the lottery is relatively straightforward — and that the advertised jackpot would get paid out to the winner in that exact amount.

But lottery winnings are considered taxable income that is subject to federal and (sometimes) state income taxes, depending on where you live.

The IRS requires all lottery agencies to withhold a flat 24% of lottery winnings over $5,000 for federal taxes.

However, since lottery winnings are taxed as ordinary income, a significant windfall would land Jerry in the highest federal income tax bracket of 37%, meaning he must progressively pay additional tax until he meets the brackets threshold.

While most states have additional taxes on lottery winnings, fortunately for Jerry, California does not.

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Lottery winnings: taking out a lump sum vs. annuity

There are two options to collect lottery winnings: a lump sum payout or an annuity payment plan.

The first option is a cash payout, where the winner is given a lump sum — a payout of typically 60% of the total value, according to State Farm.

With his option, Jerry would have the opportunity (after shelling out his taxes) to invest in growth-oriented assets like stocks and alternative investments like real estate, precious metals, and even artwork.

The second option of an annuity payment plan is ideal for those who may require some structure to keep them from overspending too quickly. An annual payout is a responsible way to ensure you continue to have a steady source of income throughout your adult life.

In Jerry’s case, Powerball jackpots are paid out in 30 graduated installments over 29 years. The structure of the annuity payments vary depending on the state and the rules of the lottery company, but by the end of 30 years you’ll have received the full advertised amount of your lottery winnings — whereas with a lump sum payout you'd receive about half of the total winnings.

But first, Jerry needs to have his jackpot winnings deposited into his bank account — something he hopes to receive soon after more than two months of waiting, he told ABC 7.