WIXLIB

Winners’Handbook

Congratulations, you’ve won the lottery!This handbook provides you with all the information you need to be smart about your winnings.

Laurana BPick 4 WinnerPark City, ILTable of ContentsGeneral Questions. 3Estate Planning & Forms. 9Assignment of Prize Payments. 11Public Disclosure. 13Responsible Gaming. 15Managing Your Winnings. 17Winner’s Checklist. 22Lottery Prize Centers. 24

General Questions3

Congratulations, you’ve won the Lottery. Whathappens next?Winning a large lottery prize can be a wonderfulexperience as you suddenly find yourself presented with new opportunities and the financialresources to live the life of your dreams.Acquiring a large sum of money may give newmeaning to how you live your life and manageyour budget. Planning for the future by makinginformed responsible decisions will help youenjoy your prize winnings to the maximum.This Winners’ Handbook answers basic questionsLottery winners ask. Please take the time to readthis handbook thoroughly. If you have furtherquestions, you may contact the Lottery’s Springfield office at (217) 524-5147. Most importantly,don’t make sudden changes; take all the timeyou need prior to ticket expiration. Enjoy yourwinnings!When do I receive my check? Claims up to 25,000 will generally be paidat the claim center on the same day. Claims over 25,000 will generally be paidwithin four to six weeks from the claim dateand will be mailed to the address printed onthe claim form. If you opted for direct deposit, your money willbe available in approximately four to six weeks.If your prize is paid in installments, the firstpayment will usually be made within four to sixweeks, and you will be notified of your quarterlyor annual payment date(s). For additional information contact the Lottery’s Springfield Office at(217) 524-5147.How does the Lottery’s payment systemwork?The Illinois Lottery pays Lotto, Mega Millions andPowerball grand prizes either in 30 annual paymentsor a lump sum payment equal to the cash valueof the jackpot prize. Lotto, Mega Millions andPowerball winners have 60 days after the date ofthe drawing to choose the cash option or annualpayments.You may select a payment option by completing4

the cash election form. The cash election formcan be obtained from one of the Illinois Lottery’s 5prize payment centers or by calling the SpringfieldOffice at (217) 524-5147.The form must be received by the Lottery within60 days after the date of the drawing.Group winners of a jackpot prize must all choosethe same payment option.Failure to choose a payment option within the60-day time period will automatically result inannuity payments. Annuity option: Advertised grand prize inannual or quarterly installments, less requiredwithholding. Cash option: The current market value of theprize, paid in a single lump sum, less requiredwithholding.If you choose the cash option, this amount willbe considerably less than the announced jackpot.For example, if the announced jackpot is 12million for Lotto: Approx. cash option: 7,042,000 Winner receives: 5,003,341 after federaland state taxesIf you choose the annual payment option, basedon a 12 million Lotto jackpot: Winner receives: An initial payment of 181,000 and 29 additional annual paymentswith a graduating 5% payment each year. Stateand federal taxes are withheld from each annualor quarterly payment.Who receives the interest earned on this prizemoney?If you are a winner who receives annuity payments,you receive the interest earned on the bondspurchased by the Lottery for the payment of theprize up the prize amount.For example, on a 1 million instant game prizepaid in 20 annual installments, paid over 19years: An initial payment of 50,000 is paid to thewinner four to six weeks after the prize is claimed. Approximately 730,000 cash is available5

for the purchase of bonds worth 950,000 atmaturity ( 50,000 x 19 payments). The Illinois Lottery purchases bonds with theavailable cash. A portion of the principal plus the interestaccrued over the next 19 years makes up theannual payments to the winner. After the 20th payment, the full prize amountof 1 million will have been paid.Will the Lottery pay individual prizes to groupwinners?This depends on the prize amount. If your prizeis 600 or less, only one name can appear on theback of the winning ticket and only one personcan be paid the prize.If your prize is 601 to 999,999, your groupcan claim a prize if the following procedures arefollowed: The claim form is filled out in one person’sname. The claim form is filed with IRS Form 5754(available from the Lottery Claim Center, theIllinois Department of Revenue or the IllinoisLottery website). One claim form will be completed by thegroup representative, but a winner questionnairewill be required for each person receiving apayment. Each person listed on the IRS Form 5754will receive a check for his or her portion of thewinnings, less applicable withholdings.If your prize is 1 million or more, your groupmay be entitled to form a partnership and securea federal identification number. If members of your partnership want individualchecks issued, they must state their preferencein the formal partnership agreement and mustattach the partnership agreement to the claimform. Include the names and Social Security numbersof members.If your group does not form a partnership, agroup agreement must be submitted along with6

the claim form, winner questionnaires and theIRS Form 5754.What will I pay in taxes?The Illinois Lottery is required by law to withhold: Federal taxes from prizes of 5,000 or more. Illinois State taxes from prizes of 1,000 ormore. Additional taxes on all prizes over 600from U.S. citizens and resident aliens who donot provide a Social Security number.Claimants who are non-resident aliens or do notmark the citizenship status on the claim form aresubject to federal withholding at the non-residentalien rate from all prizes over 600.Winners paid in annual installments automaticallyhave taxes withheld from each annual payment.The current withholding rate for Illinois incometax is 4.95 percent.The Lottery is currently required to withholdfederal taxes of 24 percent for U.S. citizens andresident aliens.Generally, non-resident aliens or persons notindicating their citizenship status are subject towithholding at 30 percent federal tax.State and Federal tax rates are subject to change.Tax withholding amounts are not generallydesigned to meet a winner’s total tax liability.Contact a professional tax adviser to help youdetermine your total tax liability.Does a player group divide the tax liability?Unless the number of group members exceedsour system capabilities, or the prize is 600 orless, the members of a player group may bepaid individually, and the tax liability dividedamong the members, provided: the claim form is filled out in one member’sname, and is accompanied by an IRS Form5754 setting forth the names, addresses,Social Security numbers and prize shares of allpersons entitled to a share of the prize.Using the information provided on the IRS Form7

5754, the Illinois Lottery will issue an IRS W-2GForm to each individual group member whoreceives a portion of the prize up to and including 25,000.For groups claiming prizes greater than 25,000, payments and IRS W-2G Forms will beissued by the Illinois Comptroller’s Office.Contact a professional tax advisor withadditional tax liability questions.What do I need from the Lottery in order tofile my tax return?An IRS W-2G Form will either be attached tothe check you receive from a claim center, or bemailed to you by the end of January of the NewYear from the Illinois Comptroller’s Office.Is it possible to receive more than one annualpayment in the same tax year?If you claim a large prize paid in installments inlate December, you may receive the first andsecond payments in the same tax year becauseyour first payment may not be issued until January.Can A Lien Be Filed Against My Winnings?Judgment liens, tax levies, or offsets may befiled against your prize winnings by creditorsor government agencies for payment of yourdebts. Any such offsets will be deducted fromyour next payment and the remainder, if any,will be mailed to you. The lien, levy, or offsetmay continue from year to year until the debt ispaid in full.You should also keep a copy for your records.Please remember to notify the Lottery’s ClaimsDepartment if you have changed your address.8

Estate Planning & Forms9

What happens if I die before I receive all thepayments?In the event of your death, any guaranteedremaining prize obligation will be paid to yourestate or successor trustee (if proper documentationis on file with the Lottery).Depending upon the type of prize you won,your estate or trust may receive: ongoing installment payments until theprize commitment has been fulfilled, or your estate or trust may be entitled toreceive the current cash value of the prize in alump sum.Your estate or trust representative should contactthe Lottery’s Claims Department immediately todetermine available options.A court order will be required in order to payyour heirs or beneficiaries directly unless youhave previously filed a trust document with theIllinois Lottery.Can the Lottery assign prize payments to atrust established by a winner?The Illinois Lottery Law authorizes winners toestablish revocable living trusts to receive prizepayments. The trust agreement, along with anotarized letter of direction from the winner, mustbe on file with the Lottery’s Claims Department,in order for the Lottery to recognize the trust andpay the successor trustee upon the winner’sdeath.How can I designate a beneficiary for my remaining prize payments?The Illinois Lottery Law authorizes the IllinoisLottery to pay a deceased winner’s estate or,under certain circumstances, successor trustee.10

Assignment ofPrize Payments11

Can I assign my prize or sell it to anotherparty?Winners of prizes paid in quarterly or annualinstallments may assign future prize paymentsto a third party. If you are planning to assign yourprize payments there are specific regulationsthat affect this process.Please see 20 ILCS 1605/13.1.Yessica PTreasure Hunt WinnerRockford, IL12Companies may contact you offering topurchase some or all of your remaining installmentprize payments. The Illinois Lottery does notendorse any of these companies or disclosepersonal information about prize winners otherthan the winner’s name and their city of residenceat the time the prize was claimed. The Lotteryencourages winners to seek independentfinancial and legal advice before making anyassignment decision.12

Public Disclosure13

What personal information is subject to publicdisclosure?As a state agency, the Illinois Lottery is subjectto public disclosure laws that allow access tocertain governmental records: Your name City of residence The name and location of the retailer whosold the winning ticket The date you won The amount of your winnings, including yourgross and net installment payments, are mattersof public record and are subject to disclosureIllinois Lottery Claim form to keep your nameand city of residence confidential from publicdisclosure. However, the Illinois Lottery mayrelease your name and city of residence pursuantto an Illinois Freedom of Information Act requestor if legally mandated to do so.What do I do if I am contacted by thenews media?If you have questions aboutdealing with the news media,please call (312) 793-3030 andask to speak to the Lottery’sCommunications Director.The Lottery may release additional informationif legally mandated or upon your request.Will the Illinois Lottery publicly release myname and city of residence absent a requestunder applicable law?Bruce C 75,000 WinnerDeKalb, ILThis depends on the prize amount. If your prizeis 250,000 or more, at the time of claiming theprize, you may submit a written request on the14

Responsible Gaming15