A LOTTERY winner has had a huge chunk of his prize shaved off due to an often overlooked rule.
Queens’ Maojun Cheng is the youngest grand prize winner for the New York Lottery’s deluxe scratch-off game.
After picking up a scratch card at a gift shop in Flushing, he found out he’d won $10 million.
However, because he opted for a one-time lump sum payment, he only saw $6,122,400 of the prize, according to the lottery.
If you receive your winnings in one lump sum, you will receive less than if you had chosen to receive the money in installments.
There are also necessary federal and state taxes that reduce the amount of cash you receive.
However, winners are likely to pay more taxes if they choose to pay annually.
ANOTHER NEW YORK WINNER
In the meantime, there is one more winning ticket to be claimed at Ozone Park.
The ticket, worth up to $483 million, is the 13th largest jackpot in Mega Millions history.
The mystery winner can receive full payment in annual installments or take a one-time cash payment of $256.9 million.
New York had several winners, including the Bronx’s Jerson Garcia, who won his first game.
He matched five Mega Millions numbers and the Mega Ball, which was drawn on January 17th, and won a total of $20 million.
Last month he claimed $6,492,471 as a one-time lump sum payment.
“I plan to enjoy the fortune with my family,” he said.
“I really want to help my mother and buy her a house. It is every son’s dream to buy his mother a house.”
CALL FOR CASH
Many winners opt for an annuity, which is offered as an immediate payment followed by a series of annual payments.
This ensures the winner a guaranteed income for several years or even decades.
There are some issues that make winners choose a lump sum option.
For example, the group that makes the payout over the years could run out of money.
Or, in a more morbid scenario, the winner may die before collecting all of their earnings.
In addition, as tax rates increase over the years, these higher amounts are deducted from the price.
Check out another winner who made $1 million and ended up with less than $200,000 left.
And watch the cautionary tale of a lottery winner who was left “penniless”.