Here's why a sole winner of the $US700m Powerball draw might only get to keep $US220.6m

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A couple of Queensland grandparents scooped the largest single prize in Australian Powerball history last night, pocketing a cool $70 million.

And they get to keep every cent of it.

The couple live in Hervey Bay and ignored six calls from Golden Casket on Thursday night after the draw, oblivious to the win.

When they were notified in the morning, they admitted they’d only ever won a chook raffle prior to this $70 million payday.

Best of all, there are no taxes collected on Australian Powerball prizes. The only way you’d pay tax is on any money earned from investing your Powerball winnings.

In the USA, where the next Powerball jackpot is a whopping $US700 million – that’s just $8.4 million shy of $AU1 billion) – the winner could find themselves whining about a measly take home packet of $US220.6m.

That’s because it’s considered earnings in the US, but it also can vary greatly on where you bought the winning ticket.

Your first decision is whether to take the money in a lump sum. If you do, you’ll get a smaller payout.

It’s a bit of a marketing ploy by Powerball. The “$US700m” is based on taking home 30 payments over 29 years. It’s actually $US428.4 million, adjusted up for inflation.

So, if you choose to take the lump sum, you’re better off having bought your ticket in New Hampshire, Tennessee, Texas, South Dakota, Florida, Washington, California or Pennsylvania. That’s because they don’t collect state income tax.

Best case scenario is you’ll go home with a $US258.8 million cheque.

Win in any of the other 36 US states and things get a bit more complicated. You’ll pay a state tax and probably a city levy.

Forbes turned to calculations by Gerald T. Prante and Austin John of the Lynchburg College School of Business and Economics for guidance and found that:

…if a New York City resident wins the jackpot, he or she will end up paying at a top 48.5% combined federal, state and city rate, up from 43.3% in 2012, for a whopping total tax bill of $207.8 million, and a take home pot of $220.6 million.

So there you have it, in case you were wondering.

Or dreaming.

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