Winning prizes from the Powerball are subject to various processes, and depending on how much you won, can make it a little more challenging. The following are categories that will help you decide what to do should you win a certain amount of money;
Claiming Prizes:
Prizes may only be claimed by the registered account holder online. Prizes of $600 or less will be automatically added to your account balance.
Prizes over $600 to $50,000 will be held pending your completion of the online claim process. Prizes over $50,000 must be claimed in person at the Michigan Lottery’s central office in Lansing.
If you win a prize over $50,000, please contact Michigan Lottery Public Relations at (517) 373-1237 for more information or check the Michigan Lottery website. You may only win one prize per wager. All prizes will be truncated into whole dollars.
All prizes must be claimed within one year of the date won, or they will expire to being worthless. The claim process may be changed at any time without notice, so it is important to stay up to date with lottery information.
Cash Payment Option:
For certain qualified prizes, you may have the option to select between annual payments or a one-time cash payment at a discounted rate. If your prize qualifies, a formal notice of the cash payment option will be given at the time you file a claim.
If you decide to choose the cash payment option, you must complete the payment election form within 60 days of your claim. If the election is not made within 60 days of the formal notice, the prize will be paid automatically in annual installments.
Your cash payment selection, once elected, is irrevocable and may only be exercised by the account holder only, and is only allowed for the entire prize amount.
Income Tax Requirements:
Prizes over $5,000 are subject to federal tax withholding for US residents and state income tax withholding at the current rate. Any money that is withheld in compliance with these requirements will be deposited with the federal and state treasuries under your federal identification number.
At the time of claiming a prize over $600, you will be required to complete a claim form. You will receive a tax statement (known as the Form W2-G), which simply identifies the amount of the prize awarded and the tax withheld.
Winner Liability:
Before any payment of a prize over $1,000, the state law requires that it has to determine whether or not you have certain unpaid debts and, if so, must apply the prize to payment of that debt. (Check MCL 432.32 for specific details).
Michigan Lottery will provide your name, prizes amount, and other identifying information to the Department of Health and Human Services within seven days after paying a prize of $1,000.00 or more.