Cash for Life is a lottery game available in nine states, including Maryland. It offers a top prize of $1,000 a day for life and a second prize of $1,000 a week for life. Cash for Life prizes in Maryland are paid out annually rather than as a lump sum, allowing winners to receive regular payments over many years. This article will provide an overview of how the Cash for Life lottery works in Maryland, the odds of winning, how much taxes reduce the prizes, and how annuity payments are calculated. With thousands of people playing Cash for Life every day in Maryland, it’s helpful to understand exactly how much you can win if luck strikes with a top prize ticket.
How the Cash for Life Lottery Works in Maryland
Cash for Life is operated by the Maryland Lottery. To play, you choose 5 numbers from 1 to 60 and 1 Cash Ball number from 1 to 4. There are six prize tiers based on how many numbers you match. You can purchase tickets at lottery retailers across the state or via the Maryland Lottery website and app.
Twice a day, Monday through Sunday, winning numbers are drawn for Cash for Life. If you match all 5 numbers plus the Cash Ball, you win the top prize of $1,000 per day for life. Matching all 5 numbers without the Cash Ball wins $1,000 per week for life as the second prize. Lesser prizes range from $2 for matching just the Cash Ball up to $2,500 for matching 4 numbers plus the Cash Ball.
All Maryland Lottery prizes including Cash for Life must be claimed within 182 days of the drawing. For the top two life prizes, you must claim in person at Maryland Lottery headquarters.
Cash for Life Odds
The chances of winning the top prize in Cash for Life are about 1 in 21,846,048. This means you have a 1 in almost 22 million chance to hit the 5 numbers plus Cash Ball required for $1,000 per day for life.
Your odds improve slightly to 1 in 7,282,016 for matching 5 numbers to claim $1,000 per week for life as the game’s second prize.
The overall chances of winning any Cash for Life prize are about 1 in 8. Other Maryland lottery games have similar odds, like Powerball at 1 in 24.9 million odds for the jackpot. Cash for Life has better chances than Mega Millions, which are 1 in 302,575,350 for the top prize. But your odds are much longer than games like Pick 3 where a $500 top prize can be won at straight 1 in 1,000 odds.
Here is a table summarizing the Cash for Life odds and prizes in Maryland:
| Match | Odds | Prize |
|---|---|---|
| 5 numbers + Cash Ball | 1 in 21,846,048 | $1,000 per day for life |
| 5 numbers | 1 in 7,282,016 | $1,000 per week for life |
| 4 numbers + Cash Ball | 1 in 103,896 | $2,500 |
| 4 numbers | 1 in 3,385 | $500 |
| 3 numbers + Cash Ball | 1 in 1,442 | $25 |
| 3 numbers | 1 in 69 | $5 |
| 2 numbers + Cash Ball | 1 in 49 | $3 |
| 1 number + Cash Ball | 1 in 18 | $2 |
Maryland Tax Withholding on Cash for Life Prizes
One thing to keep in mind if you beat the odds and hit a big Cash for Life prize is that taxes will take a cut of your winnings in Maryland. The state applies a mandatory 5% tax withholding on lottery prizes over $5,000. Federal taxes also apply at a 24% flat rate on the full prize amount.
For the $1,000 a day for life top prize, the advertised $365,000 annual payment is reduced by about 29% for taxes. After the mandatory state and federal withholdings, your annual Cash for Life payment would be approximately $259,500. You are responsible for any additional federal tax owed when filing returns.
The $52,000 per year second prize of $1,000 per week for life sees about the same 29% tax reduction. You would receive an estimated net payment of around $36,920 annually after required tax withholdings on this Maryland Lottery prize.
Cash for Life Annuity Payments
Cash for Life prizes in Maryland are not awarded as one-time lump sum payments. Instead, they are structured as annuity payments made once per year for the duration of the winner’s life.
For the top prize of $1,000 per day for life, this equals $365,000 per year. After taxes, the estimated net annual payment is $259,500. This payment is made once per year on the anniversary of the win for as long as you live.
The second prize of $1,000 per week for life equates to $52,000 annually. The estimated net annual annuity payment is $36,920 after tax withholdings. Second prize winners can also expect to receive one payment per year for life.
Annuity payments continue for a minimum of 20 years. So if you won the $1,000 a day for life prize and did not live for 20 years after winning, payments would go to your estate until reaching the minimum 20 years guaranteed. The Maryland Lottery purchases annuities to fund Cash for Life prizes from insurance companies rated excellent or superior.
Changing the Payment Option
For either of the Cash for Life top two prizes in Maryland, you do have the option to change from annual annuity payments to a discounted one-time cash payout. However, this results in a significantly reduced payment compared to the overall winnings you would receive over 20 or 30 years.
To get the full advertised amount, you need to elect for annuity payments over the duration of your life expectancy. The cash value is much lower because the lottery only sets aside a portion of the total prize money to invest and pay out over time.
You would need to consider your age, health, and other financial factors to determine if taking the cash option makes sense. For most winners, receiving annual payments over 20+ years results in substantially higher total winnings. But if you have urgent needs or do not expect to live long, a lump sum cashout may be preferred.
Claiming Procedure for Big Prizes
If you are lucky enough to match the 5 numbers plus Cash Ball for one of the top 2 prizes in Maryland Lottery’s Cash for Life game, you will need to follow some special procedures to claim.
First, you must sign the back of your winning ticket immediately and keep it safe. The Maryland Lottery recommends you make a copy of both sides of the ticket for your records as well.
For prizes over $5,000, you must claim in person at Lottery headquarters in Baltimore. You will need to schedule an appointment to visit by calling 410-230-8700.
When claiming your prize, be sure to bring a valid photo ID, your Social Security card or ITIN confirmation number, and proof of residency such as a utility bill or driver’s license.
At Lottery headquarters, you will complete a claim form and W-2G for tax reporting. Annuity options will be explained by Lottery officials and you must choose annual payments or a one-time cash value amount. You may need to talk to financial experts before making this important choice.
It’s suggested you consult a lawyer or accountant about creating a trust or legal entity to manage the winnings. This helps protect your identity which Lotteries must make public for prizes over $600. It also provides help navigating taxes and responsible money management.
Remaining Anonymous
For major lottery prizes, it’s nice to dream about lavish spending and extravagant luxuries. But be aware your name and hometown will be released publicly when you claim a jackpot in Maryland.
State law requires the Lottery to identify winners of more than $600 for transparency. However, there are options to maintain some privacy.
You can have a lawyer accept the prize on behalf of a trust or limited liability company. This avoids putting your name out there while still getting your winnings. A financial advisor can also help you keep a low profile when using the money.
The Maryland Lottery will honor requests to keep your face hidden from promotional photos and materials. You should still be prepared for phone calls and people showing up asking for money.
Staying anonymous takes planning and restraint. But it helps avoid issues like fraud, scams, constant requests for money, and family conflict over your newfound wealth.
Getting the Annuity Payments
Once you complete the claims process and paperwork, when do you actually get your first annual Cash for Life payment in Maryland?
For both the top $1,000 a day prize and $1,000 a week second prize, your first annuity check comes on the one-year anniversary of the draw date when you won.
If your prize was from a February 1st drawing, you would receive your initial payment around February 1st the following year. Subsequent payments also arrive yearly near the anniversary.
These annual payments based on your win date continue for a minimum guarantee of 20 years. For the top prize, they continue for as long as you live beyond 20 years as well. At your passing, any guaranteed remaining payments go to your designated beneficiary or estate.
Payments are made by the insurance company funding the annuity and administered by the Maryland Lottery. You can have payments direct deposited to avoid the hassle of depositing paper checks.
What to Do If You Win
Here are some key steps to take if you win one of the Cash for Life top prizes in Maryland:
– Sign the back of your ticket and make copies before claiming.
– Call the Lottery claims number to schedule an appointment.
– Decide if you want to claim individually or via a trust or entity.
– Consult a financial planner, lawyer, and accountant.
– Choose between annuity payments or cash payout.
– Provide all required identification and tax documents.
– Allow some publicity but set limits and protect your privacy.
– Keep details of your win private from acquaintances.
– Wait for your first annuity payment about one year after winning.
– Carefully manage and invest the money for lifelong stability.
Winners in Maryland
Since Cash for Life began in Maryland in 2014, there have been two top prize wins in the state:
– In 2015, a Queen Anne’s County woman won the $1,000 a day for life prize from a ticket she bought at Shore Stop in Stevensville.
– In 2016, an Anne Arundel County man claimed the same $1,000 a day top award from a ticket he purchased at Arundel Mills Liquors in Hanover.
Besides these two big life annuity winners, there have been dozens of winners of the lower tier Cash for Life prizes in Maryland. For fiscal year 2022, the Maryland Lottery paid almost $9 million in Cash for Life prizes.
While no one has yet hit the Cash for Life jackpot in Maryland in 2022, it could produce a big winner anytime. When the next $1,000 a day or $1,000 a week for life prize hits, lottery officials will be prepared to walk the lucky person through the claims process and set up their annuity payments.
Odds of Multiple Top Prizes
With two claims of the $1,000 a day for life top prize already in Maryland, could there be multiple annuity winners still out there? Due to the long odds of 1 in 21 million, it is unlikely there would ever be more than a few concurrent winners of the game’s top prize in the state.
If there were multiple holders of the life annuity prize, each would receive the full $1,000 per day advertised amount. This has happened occasionally in other lotteries when two tickets matched all numbers in the same draw. Each valid winner simply gets the full prize annuity separately.
The Maryland Lottery purchases insurance annuities to fund prizes based on expected winners. Having multiple top prize annuities is extremely improbable but would not impact the payments to each winner if it did occur. Each $1,000 a day for life prize would pay out independently, provided funds were available.
Unclaimed Prizes
For Cash for Life prizes that go unclaimed in Maryland, the money ultimately gets returned to the game’s prize fund. For example, if no one claimed a $500 prize from a certain drawing, those funds would roll over to the Cash for Life reserve pool after the 182 day claim period.
State law requires the Maryland Lottery to hold unclaimed wins for 182 days. If no one steps up with a valid winning ticket in that timeframe, the money goes back to the game.
Prize funds get used to increase payouts for players who win and claim their Cash for Life tickets on time. So while you don’t want to miss claiming a prize that belongs to you, when others fail to come forward it can positively impact payouts.
Conclusion
Cash for Life offers Maryland lottery players two exciting top prizes with annuity payments for life. Matching all 5 numbers plus the Cash Ball wins you $1,000 per day each year, while getting just the 5 numbers pays $1,000 weekly. After tax withholdings, annual payments are approximately $259,500 and $36,920 for the two jackpots.
To have a chance at Cash for Life’s top prizes, you need to beat odds of about 1 in 22 million and 1 in 7 million. Taxes take out close to 30% of the advertised annuities. You can take a reduced lump sum or receive bigger overall winnings through annual payments over 20 years or more.
Cash for Life annuities provide stable long-term income that is well-managed by the Maryland Lottery. While jackpot drawings happen twice a day, there are only usually a few winners of the game’s top two prizes each year in the state. Playing your lucky numbers regularly gives you an ongoing chance at the life-changing $1,000 daily or weekly payouts.
