Delaware lottery tax in 2026: taxed in full, withheld not at all
Every winning Delaware Lottery ticket is subject to Delaware income tax, up to 6.6 %, yet the lottery publishes no state withholding.
- Top Delaware rate
- 6.6 %
- Top rate starts at
- $60,000
- State withholding
- none published
- Federal withholding
- 24 %
Owed with the return on top of withholding
$359,146
Federal withholding is 24 % of a prize over $5,000; the federal tax actually due on this prize is $707,180 (35.4 %).
| Federal tax due | $707,180 |
| Federal withholding | $480,000 |
| State and city tax due | $131,966 |
| State withholding | $0 |
| Total withheld | $480,000 |
| Total tax | $839,146 |
Compiled by Radif Partners · How we calculate · brackets, state rates and lottery rules read on official sites · estimate, not tax advice
A single Delaware resident who wins $2,000,000 on a Delaware Lottery ticket owes Delaware about $131,966 for 2026 and the IRS $707,180, and keeps $1,160,854. Delaware's top rate of 6.6 % starts at $60,000 of taxable income, the same line for single filers and married couples, so almost the whole prize is taxed at that rate. The Delaware Lottery says all its winning tickets are subject to Delaware income tax, but its own answer on taxes taken out mentions only the 24 % federal withholding on prizes over $5,000; it publishes no state withholding rate. The whole Delaware tax, $131,966 here, is therefore paid later, with the return or in estimated payments. Marylanders, Pennsylvanians and New Jersey residents who buy in Delaware owe it as nonresidents and claim a credit at home.
What the Delaware claim leaves to pay
Owed with the return on top of withholding
$359,146
| Federal tax due | $707,180 |
| Federal withholding | $480,000 |
| State and city tax due | $131,966 |
| State withholding | $0 |
Taxable, but not withheld
The Delaware Lottery states plainly that all winning Delaware Lottery tickets are subject to Delaware income tax (Delaware Lottery, claim prizes). Its answer to the question of how much is taken out for federal and state taxes speaks only of the federal 24 % on prizes over $5,000 (Delaware Lottery FAQs). No state percentage appears in the official pages read for this site, so the calculator withholds nothing for Delaware, and the state tax falls entirely due at filing.
That changes the cash-flow picture more than the tax itself. On $2,000,000, the winner walks away from the claim with the federal withholding deducted and nothing else, then owes $227,180 more to the IRS and $131,966 to Delaware. Both the federal and the Delaware rules charge a penalty when a large income is not covered during the year, so a winner who claims in March usually pays an estimate for the quarter. Withholding against the tax due lays out that gap for other states, most of which do withhold.
One schedule for single filers and couples
Delaware's rates are set in Title 30 of the Delaware Code and have not changed since 2014: nothing on the first $2,000, then 2.2 %, 3.9 %, 4.8 %, 5.2 %, 5.55 % and 6.6 % above $60,000 (Delaware Code, Title 30, section 1102). The thresholds are not indexed and they are identical for every filing status, so marriage does not widen the brackets. A couple gets a larger standard deduction, $6,500 against $3,250, plus a small personal credit for each exemption, and little else.
| Prize | Single, Delaware tax | Couple, Delaware tax | Single keeps | Couple keeps |
|---|---|---|---|---|
| $250,000 | $16,466 | $16,500 | $166,920 | $177,272 |
| $2,000,000 | $131,966 | $132,000 | $1,160,854 | $1,183,390 |
The Delaware column barely moves between the two households, while the federal brackets, which are twice as wide for a couple, explain most of the difference in what is kept. For a couple the prize still meets the 6.6 % rate from its first dollar, since $120,000 of salaries already passes the top threshold.
Elkton, Philadelphia and the Delaware Memorial Bridge
Delaware sits between three larger states, and its lottery retailers along the borders sell to their residents. The 2025 nonresident instructions count prizes, awards and gambling winnings from Delaware sources as Delaware income of a nonresident (Delaware PIT-NON instructions). The home state then taxes the winner on all income and credits the Delaware tax up to its own.
| Winner lives in | Delaware | Home state after credit | Federal | Kept |
|---|---|---|---|---|
| Delaware | $131,966 | $0 | $707,180 | $1,160,854 |
| Maryland | $130,805 | $1,063 | $707,180 | $1,160,952 |
| Pennsylvania | $130,805 | $0 | $707,180 | $1,162,015 |
| New Jersey | $130,805 | $55,896 | $707,180 | $1,106,119 |
The Pennsylvania buyer pays more to Delaware than Pennsylvania's flat 3.07 % would take, so the credit removes the Pennsylvania tax and the difference stays with Delaware. New Jersey's top rate is higher than Delaware's, so the New Jersey resident still owes $55,896 at home after the credit. A Marylander also faces a county tax at home that this table leaves out; the Maryland page adds it.
A Delawarean with a Maryland ticket
The opposite crossing is common around Salisbury and Ocean City. Maryland taxes nonresidents on its lottery prizes and withholds at the claim, Delaware taxes its residents on income from everywhere, and Delaware's credit for income taxes paid to another state, Schedule I of form PIT-RSS, offsets the Maryland tax up to the Delaware tax on that income; the other state's return is attached (Delaware PIT-RES instructions). On $2,000,000 the Delaware resident pays Maryland $168,366 and Delaware $1,161. Tickets bought in another state compares more pairs.
Losses and what remains open
Delaware itemized deductions allow other deductions as permitted under federal law, with all federal limitations, so gambling losses itemized federally, at 90 % of their amount from 2026 and never beyond winnings, carry into the Delaware return. Two points are not settled by the official sources read: whether the Delaware Lottery withholds any state tax in practice on a very large prize, and its rate if it does. The figures here are estimates on the 2026 rules, not tax advice. Lottery play has a cost; the National Problem Gambling Helpline is free and confidential at 1-800-MY-RESET (NCPG).