Delaware lottery winnings are taxable
Rate checked on November 5, 2026 against the sources listed at the end of this page.
The old exemption ended in 2010
The Delaware Lottery Guide to Winning confirms that winning Delaware Lottery tickets are subject to Delaware income tax. The 2009 repeal removed the exemption for tax years after December 31, 2009. Advice saying Delaware Lottery winnings are exempt is outdated.
The Division of Revenue lists a 6.6% top rate for income above $60,000. A large jackpot therefore faces state income tax as well as federal tax.
Take-home pay on a lump-sum prize in Delaware
The table applies the top federal rate of 37% plus 6.6% Delaware tax. Amounts are the cash (lump-sum) value you receive, not the advertised annuity jackpot.
| Cash prize | Federal (37%) | State | You keep |
|---|---|---|---|
| $1.00M | −$370,000 | −$66,000 | $564,000 |
| $10.00M | −$3.70M | −$660,000 | $5.64M |
| $100.00M | −$37.00M | −$6.60M | $56.40M |
| $500.00M | −$185.00M | −$33.00M | $282.00M |
| $1.00B | −$370.00M | −$66.00M | $564.00M |
Federal figure is the total owed at the top bracket. At claim time only 24% is withheld; the rest is due when you file. Smaller prizes can fall into lower brackets, so the real federal bill may be less.
State withholding: check with the Delaware Lottery
The Lottery guide describes federal withholding on prizes over $5,000. We found no confirmed state withholding rule. Check with the Delaware Lottery about what will actually be deducted and with Revenue about estimated payments; the absence of a stated deduction does not make the prize exempt.
Winners who live elsewhere
Your home state may also tax the prize. We have not confirmed the nonresident filing treatment on an open official page. Residents of Pennsylvania, Maryland and New Jersey should check both states before claiming.
Common questions
Are Delaware Lottery prizes exempt from state tax?
No. The exemption ended for tax years beginning in 2010. The top Delaware rate is 6.6%.
Sources
- IRS Topic 419: Gambling income and losses
- IRS Instructions for Forms W-2G and 5754
- Delaware Division of Revenue: personal income tax FAQs (6.6%)
- Delaware Lottery prizes are subject to Delaware income tax. Federal withholding over $5,000.
- The 2009 act eliminated the lottery exemption from tax year 2010.
- §1102 rate schedule, top 6.6% over $60,000 (years after 2013).
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