Gambling winnings tax in Delaware

Delaware allows gambling losses only as an itemized deduction on the state return, whether or not you itemize federally. Take its standard deduction and it taxes your gross winnings. Whether only 90 percent of your losses count from 2026 is not settled.

Checked against Delaware’s own sources on 2026-09-16.

In short

No Delaware rule for state withholding on gambling or lottery winnings was found. The Delaware Lottery says winnings are taxable but describes only federal withholding.7, 8
Wilmington’s earned income tax does not on its face apply to gambling winnings, but the city ordinance could not be read to confirm it.

How Delaware treats gambling losses

4, 5

Delaware does not tie the deduction to your federal itemizing choice. You can itemize on the Delaware return even if you take the federal standard deduction, but the losses count only if you do, in place of Delaware's standard deduction.

The two examples below are the same numbers the calculator uses, worked at Delaware rates.

Two examples, worked at 2026 Delaware rates

A single filer with $60,000 of other income who takes the standard deduction on everything except gambling losses.

A losing year

You win $50,000 and lose $52,000, so you finish down $2,000.

Federal: $3,596
Delaware: $392
Total: $3,988

You finished the year down and still owe tax.

Federally you itemize, so your losses offset your winnings, but the 2026 rule caps that deduction at 90 percent and leaves $3,200 taxable. Delaware lets you deduct gambling losses as an itemized deduction on the state return, whether or not you itemize federally. Your Delaware income, after the larger of the standard deduction and your itemized deductions, goes from $56,750 without the win to $63,200 with it. The extra $6,450 is taxed at graduated rates, which comes to $392.

A winning year

You win $50,000 and lose $10,000, so you finish up $40,000.

Federal: $10,350
Delaware: $2,886
Total: $13,236

Federally you take the $16,100 standard deduction, which is worth more than itemizing, so your gambling losses do not reduce your federal tax at all. Delaware lets you deduct gambling losses as an itemized deduction on the state return, whether or not you itemize federally. Your Delaware income, after the larger of the standard deduction and your itemized deductions, goes from $56,750 without the win to $101,000 with it. The extra $44,250 is taxed at graduated rates, which comes to $2,886.

Delaware income tax rates, 2026

Taxable income	Rate
$0 to $2,000	0 percent
$2,000 to $5,000	2.2 percent
$5,000 to $10,000	3.9 percent
$10,000 to $20,000	4.8 percent
$20,000 to $25,000	5.2 percent
$25,000 to $60,000	5.55 percent
$60,000 and above	6.6 percent

The calculator also applies what this table leaves out: the federal overall limit on itemized deductions at the top federal bracket, taken before the table and a personal credit off the tax, which does not change with income.

The federal 90 percent loss limit in Delaware

3, 4, 9

From tax year 2026 the federal deduction for gambling losses is cut to 90 percent of what you lost, and never more than what you won. Public Law 119-21 did it, at section 70114(a), by rewriting 26 U.S.C. 165(d).

Delaware has not said whether the federal 90 percent limit applies. Its own law measures the state deduction by the federal figure, so the limit can arrive without Delaware doing anything. Delaware follows the federal code as it changes.

Our estimate assumes the limit applies, which gives the higher tax. The calculator also shows the tax if the limit does not apply. We would rather tell you the number could be lower than let you plan around one that turns out to be too low.

More about Delaware

Tax rates

Every filing status uses the same rate table.3

If your taxable income is $60,000 or less, Delaware law has you use a lookup table, not the rate schedule.3

Withholding

No Delaware rule for state withholding on gambling or lottery winnings was found. The Delaware withholding law covers only wages and other pay from an employer. The Delaware Lottery says winnings are taxable but describes only federal withholding.7, 8

If you itemize

How the 2026 Delaware form applies the federal overall limit on itemized deductions to your Delaware itemized deductions is not settled. That includes a filer who takes the federal standard deduction and itemizes for Delaware.6

Local tax

Wilmington has an earned income tax. On its face it does not apply to gambling winnings, but the city ordinance could not be read to confirm it.

About this estimate

The calculator takes Delaware’s personal credit of $110, or $220 on a joint return, off the tax. If you are 65 or older it adds $2,500 a person to the standard deduction and takes $110 more credit a person. That credit starts at 60, and the calculator asks only about 65, so from 60 to 64 the figure can be up to $110 high. It leaves out the credits for dependents and the $2,000 exclusion at 60 or older.

If your taxable income is $60,000 or less, Delaware has you use a lookup table, so your tax can differ from the calculator by a few dollars.

The calculator applies the federal overall limit on itemized deductions to your Delaware itemized deductions, even if you take the federal standard deduction and itemize for Delaware. How the 2026 Delaware form applies the cut is not settled.6

Sources

Every figure above traces to a primary source: a statute, an administrative code, a state agency page, or official form instructions.

1. 30 Del. C. 1108(b): $2,500 added to the standard deduction at 65 or older. 1110(b): a personal credit of $110 for each personal exemption, plus $110 for each resident 60 or older, never more than the tax. 1106(b)(2): the $2,000 exclusion at 60 or older (checked 2026-10-12)
2. 30 Del. C. 1108(a)(3), standard deduction of $3,250, or $6,500 on a joint return (checked 2026-09-25)
3. 30 Del. C. 1102, imposition and rate of tax (checked 2026-09-11)
4. 30 Del. C. 1109, itemized deductions permitted without federal itemization, measured by the federal deductions as they become effective (checked 2026-09-11)
5. Form PIT-RES instructions (2025), itemizing for Delaware without itemizing federally (checked 2026-09-16)
6. 30 Del. C. 1109(a): "the sum of the itemized deductions claimed on the federal income tax return as shall be permitted under the laws of the United States", which from 2026 is after the federal overall limit on itemized deductions (checked 2026-10-01)
7. 30 Del. C. 1151 to 1160, withholding of tax, which names wages and no gambling or lottery winnings (checked 2026-10-06)
8. Delaware Lottery FAQ: winnings are subject to Delaware income tax, and the Lottery withholds federal tax over $5,000 (checked 2026-10-06)

The federal rule, for the parts of this page that rest on it

9. Public Law 119-21 section 70114(a), which rewrote 26 U.S.C. 165(d) on wagering losses from tax year 2026 and sets out its text (checked 2026-10-18)

We could not confirm these from an official source: whether any city or county tax applies; the payout at which withholding starts; the withholding rate; how the state treats a non-resident.