This is why simply subtracting 24% from the cash prize should not automatically be described as the winner's final after-tax wealth.
California Is Different
California adds another important detail.
The state does not tax California Lottery winnings as California taxable income.
The California Franchise Tax Board explicitly states that winnings from the California Lottery—including Powerball and Mega Millions—are not subject to California state income tax.
That does not mean Castro escaped taxation altogether.
Federal taxation still applies.
But compared with a winner living in a state that imposes its own income tax on lottery winnings, the absence of California state tax makes a substantial difference.
This is one reason it is important to distinguish between federal tax rules and state tax rules when discussing lottery winners.
A headline such as “the winner lost half the jackpot to taxes” can conceal important differences between jurisdictions and individual tax situations.
Where Does the $628 Million Figure Come From?
The figure of approximately $628 million has circulated as an estimate of what Castro could have left after federal taxes.
It is important to understand what that number represents.
It is not the official cash payout figure announced by Powerball.
It is also not a publicly disclosed bank balance.
The official number is the $997,617,687.27 cash option before taxes.
The approximate $628 million figure is instead a calculation based on estimated federal taxation.
That distinction matters.
A person's final tax liability depends on the applicable tax rules and the individual's complete tax circumstances.
The Internal Revenue Service requires lottery winnings to be included in taxable income.
Therefore, it is more accurate to describe the $628 million figure as an estimated after-federal-tax amount, rather than saying definitively that Castro “received $628 million in the bank.”
The simpler version is:
$2.04 billion advertised jackpot.
$997.6 million official lump-sum value before taxes.
Approximately $628 million as a commonly cited estimate after federal taxes, depending on the final tax calculation.
That sequence tells a much more accurate story.
The Difference Between a Headline and Reality
The Castro jackpot provides an unusually clear example of how headline numbers work.
Imagine seeing this:
“California Man Wins $2.04 Billion Powerball Jackpot.”
That statement is correct.
But it does not answer several important questions.
How will the winner receive the money?
How much is the cash option?
How much will be withheld?
How much will ultimately be owed in taxes?
How much will remain after those taxes?
And what happens to the money afterward?
Those questions can produce very different numbers.
The $2.04 billion figure describes the annuity.
The $997.6 million figure describes the cash option before taxes.
The approximately $628 million figure represents an estimate after federal taxes.
Each number answers a different question.
Confusing them can make the financial reality of a lottery win difficult to understand.
Why Someone Might Choose the Lump Sum
Castro's decision to take the lump sum was not unusual.
Powerball winners frequently have to choose between immediate cash and an annuity.
There is no universal answer that applies to every winner.
An annuity provides a structured stream of payments over many years.
A lump sum provides immediate access to a large amount of capital.
That immediate access can give a winner greater control over investments, charitable giving, estate planning, business decisions, and other financial arrangements.
But it also places significant responsibility on the winner.
Suddenly controlling hundreds of