The Delaware Lottery's own claim-prize guidance confirms federal withholding (24%) on prizes over $5,000 and requires ID/SSN at $600+ (consistent with the standard $600 IRS W-2G reporting threshold), but — unlike most states in this project — delottery.com does not publish a specific state withholding percentage taken at claim time; secondary sources describe DE winnings as reconciled through the winner's annual state return rather than withheld upfront. Confirm current practice with the Delaware Lottery or Division of Revenue. Delaware's top state income tax bracket is 6.6% (income of $60,000 or more) — shown here as an estimate; confirm the current year's brackets with the Delaware Division of Revenue.
This page is general information, not tax advice. Rates change and personal situations differ — confirm with the Delaware Lottery, the IRS, and your state revenue department, or ask a tax professional.
| Prize | Withheld up front | Estimated Delaware tax (6.6%) | Estimated federal tax (your bracket) |
|---|---|---|---|
| $50 | Nothing withheld (under $600) | $3 | Taxable income — depends on your bracket |
| $500 | Nothing withheld (under $600) | $33 | Taxable income — depends on your bracket |
| $601 | State tax withheld + reported on Form W-2G (no federal withholding in the $600–$5,000 band) | $40 | Taxable income — depends on your bracket |
| $2,500 | State tax withheld + reported on Form W-2G (no federal withholding in the $600–$5,000 band) | $165 | Taxable income — depends on your bracket |
| $10,000 | State tax + 24% federal both withheld | $660 | 24% ($2,400) withheld up front; final amount depends on your bracket |
Yes — withholding is a prepayment, not the final bill. The prize still goes on your federal return (and your state return) as income. If more was withheld than you owe you get the difference back; if less, you pay the rest at filing time.
Generally the state where you bought the winning ticket can tax the prize (you may file a nonresident return there), and your home state taxes it too — but your home state usually gives you a credit for tax paid to the other state, so you are not taxed twice on the same dollars. A tax professional can confirm how your two states handle it.
Prizes of $600 or more are reported to the IRS on Form W-2G. Smaller prizes are not reported automatically, but legally they are still taxable income.
Federal income tax withholding of 24% applies to lottery prizes over $5,000. Below that, nothing is withheld for the IRS up front, but the prize is still taxable.