Maryland lottery tax: state, county and the buyer from next door
Maryland is one of the few states where a lottery prize meets a county income tax, and one of the few that withholds a different rate from residents and nonresidents.
- Withheld, residents
- 9.5 %
- Withheld, nonresidents
- 8.75 %
- Withholding starts over
- $5,000
- County rates
- 2.25 % to 3.3 %
Lump sum after all taxes
$162,007
35.2 % of the prize goes to tax: $87,993. $83,750 is withheld at the claim, the rest is due with the 2026 return.
| Prize this year | $250,000 |
| Federal income tax (top rate reached 35 %) | $66,614 |
| Maryland tax | $13,379 |
| Montgomery county tax | $8,000 |
| Withheld when the prize is paid | $83,750 |
| Still to pay with the return | $4,243 |
Compiled by Radif Partners · How we calculate · brackets, state rates and lottery rules read on official sites · estimate, not tax advice
Maryland taxes lottery and gambling winnings of residents and nonresidents alike. On prizes over $5,000, the Comptroller's tax alert of July 2025 sets withholding at 9.5 % for residents and 8.75 % for nonresidents, figures that replace older rates still quoted online. A resident also owes the county income tax, from 2.25 % to 3.3 % in 2026 depending on the county, with graduated schedules in Anne Arundel and Frederick. On a $250,000 prize, a single resident of Montgomery County with $60,000 of other income pays $13,379 of state tax and $8,000 of county tax, and keeps $162,007; in Worcester County the same winner keeps $164,382. A Virginia resident who bought the ticket in Maryland pays Maryland $18,542 and gets no Virginia credit for it, because Virginia allows none on lottery winnings, and keeps $150,469.
A Maryland prize by county
Lump sum after all taxes
$162,007
| Prize this year | $250,000 |
| Federal income tax (top rate reached 35 %) | $66,614 |
| Maryland tax | $13,379 |
| Montgomery county tax | $8,000 |
Two withholding rates at the Maryland Lottery counter
When a prize above $5,000 is paid, the Maryland Lottery and Gaming Control Agency takes 24 % for the IRS and a Maryland share that depends on the winner's address. The Comptroller's alert on gambling winnings, effective July 1, 2025, puts that share at 9.5 % for a Maryland resident and 8.75 % for a nonresident (Tax Alert TA-01-JUL-2025). Both figures rose with the top state rate enacted in 2025, so lists showing lower Maryland withholding describe an earlier year. The alert also says plainly that residents and nonresidents are both subject to Maryland income tax on their winnings.
A winner paid without withholding, for example on a smaller prize, is expected to pay estimated tax on Form PV when winnings exceed the amount the Comptroller sets for that purpose (2026 estimated tax worksheet). Withholding is a prepayment, nothing more: the return settles the real Maryland and county tax, which on most prizes is less than the 9.5 % held back for a resident.
The county layer, county by county
Every Maryland resident pays a local income tax to the county or to Baltimore City, computed on Maryland taxable income and filed on the state return. A prize adds to that income, so it adds to the county tax. The 2026 rates come from the Comptroller's withholding information for the year (2026 State and Local Withholding Information); two counties use graduated schedules, the others a single rate.
| County | 2026 local rate |
|---|---|
| Allegany | 3.2 % |
| Anne Arundel | graduated, 2.7 % to 3.2 % |
| Baltimore City | 3.2 % |
| Baltimore County | 3.2 % |
| Calvert | 3.2 % |
| Caroline | 3.2 % |
| Carroll | 3.03 % |
| Cecil | 2.74 % |
| Charles | 3.03 % |
| Dorchester | 3.3 % |
| Frederick | graduated, 2.25 % to 3.2 % |
| Garrett | 2.65 % |
| Harford | 3.06 % |
| Howard | 3.2 % |
| Kent | 3.3 % |
| Montgomery | 3.2 % |
| Prince George's | 3.2 % |
| Queen Anne's | 3.2 % |
| Somerset | 3.2 % |
| St. Mary's | 3.2 % |
| Talbot | 2.4 % |
| Washington | 2.95 % |
| Wicomico | 3.2 % |
| Worcester | 2.25 % |
One caution on that table: the Comptroller documents read for this site list the rates without naming lottery prizes. Since a prize is part of Maryland taxable income, the calculator applies the county rate to it, but the source itself does not say so in words.
Same prize, three counties
Take $250,000 won by a single resident with $60,000 of wages. In Montgomery County and in Baltimore City, both at the common rate, the state and county tax together come to $21,379 and $21,379, and in Worcester County, at the lowest flat rate, $19,004. Federal tax is $66,614 in all three places. The gap between the counties is modest on this amount; on a jackpot it grows to real money. A married couple in Prince George's County with $150,000 of income who take the cash value of the October 21, 2026 Powerball jackpot, $267.5 million, would owe $8,560,000 to the county alone.
Buyers from Virginia, the District and Pennsylvania
Maryland sells to a large commuter market, and a nonresident who wins on a Maryland ticket meets two tax systems. Maryland taxes the prize as Maryland-source income, and its nonresident booklet adds a special nonresident tax at 2.25 % in place of the county tax (Maryland nonresident booklet). The figures below include it: Maryland's state tax on the prize, prorated to the Maryland share of income, plus the special nonresident tax on the prize.
| Winner | Maryland tax | Home state tax after credit | Kept |
|---|---|---|---|
| Virginia resident, Maryland ticket | $18,542 | $14,375 | $150,469 |
| District of Columbia resident, Maryland ticket | $18,542 | $3,158 | $161,686 |
| Pennsylvania resident, Maryland ticket | $18,542 | $0 | $164,844 |
The Virginia line is the expensive one. Virginia's instructions exclude lottery and gambling winnings from its credit for taxes paid to other states, so the Virginian pays both states in full. The District resident and the Pennsylvanian each get a credit at home, capped at their own state's tax on the prize; Pennsylvania's flat rate of 3.07 % is low enough that the credit wipes out the Pennsylvania tax on the example. Virginia lottery tax and credits for tax paid to another state explain both rules.
A Maryland resident who wins elsewhere
The other direction runs through Form 502CR. A Howard County resident who wins $250,000 on a Virginia ticket pays Virginia $13,718 as a nonresident. Maryland then credits the smaller of the tax paid to Virginia and the Maryland tax on that income, split between the state credit and the local credit on the form (Form 502CR). Here the credit totals $13,718, and the winner keeps $162,007. Tickets bought across a state line runs every pair of states.
Gambling losses count in Maryland only as itemized deductions, which a resident may claim only after itemizing on the federal return (2025 resident booklet), and the federal limit to 90 % of losses applies from 2026 on the federal return. These pages describe rules and compute examples; they do not replace advice on a given return. Free, confidential help with gambling problems: 1-800-MY-RESET.