The Delaware individual income tax applies to residents on all income and to non-residents on income earned from Delaware sources, with graduated rates running from 2.2% on the first dollars above $2,000 up to 6.6% on income over $60,000. Returns are due April 30 for calendar-year filers, one month after the federal deadline. Full-year residents file Form 200-01; non-residents and part-year residents who choose that route file Form 200-02. The Division of Revenue administers the system and accepts returns electronically through the Delaware Taxpayer Portal or on paper.
Who Has to File
Every Delaware resident with gross income during the year has to file, and so does every non-resident who earned income from a Delaware job, business, or property. Residents report worldwide income. Non-residents report only what came from Delaware sources. Even if you did not live or work in the state at any point in the year, filing a non-resident return is the only way to recover Delaware tax that was withheld from your pay by mistake.
Full-Year Residents
You are a full-year resident if you were domiciled in Delaware the entire year, or if you kept a place of abode in the state and were present here more than 183 days. A narrow foreign-service exception exists for people who spent at least 495 full days abroad in an 18-month window, were in Delaware no more than 45 days during that period, and did not keep a Delaware home where a spouse or dependents lived for more than 45 days.1Justia. Delaware Code 30 – Resident Individual Defined
Part-Year Residents
If you moved into or out of Delaware during the year, you can file either Form 200-01 as a resident or Form 200-02 as a non-resident. The Division of Revenue recommends preparing both and submitting whichever produces the lower tax.2Delaware Division of Revenue. Delaware Individual Income Tax Instructions The resident return tends to work better when you had no outside income during the months you lived elsewhere. The non-resident return tends to win when you earned substantial income from other states during your period of non-residency.
Non-Residents
Non-residents do not keep a home in Delaware and were not present more than 183 days, but they had Delaware-source income from employment, business, or property. On Form 200-02 you report all income in one column and Delaware-source income in a second column. The state calculates the tax on your total income, then prorates it based on the Delaware share.
Military Spouses
Under the federal Military Spouse Residency Relief Act, the spouse of an active-duty service member stationed in Delaware keeps tax residency in their home state. Delaware wages earned by that spouse are not subject to Delaware income tax. To stop withholding at the source, file Form W-4DE with the employer. If Delaware tax was already withheld, file as a full-year non-resident to claim it back. The income may still be taxable in the home state.
Rate Brackets
Delaware uses seven brackets. Every filer uses the same table regardless of filing status.3Justia. Delaware Code 30-1102 – Imposition and Rate of Tax
- $0 to $2,000: 0%
- $2,001 to $5,000: 2.2%
- $5,001 to $10,000: 3.9%
- $10,001 to $20,000: 4.8%
- $20,001 to $25,000: 5.2%
- $25,001 to $60,000: 5.55%
- Over $60,000: 6.6%
The rates are marginal, so a taxpayer with $70,000 of taxable income pays 6.6% only on the $10,000 above $60,000.4Division of Revenue – State of Delaware. Tax Rate Changes
How Delaware Taxable Income Is Calculated
Your Delaware calculation starts with federal adjusted gross income, then applies state-specific additions and subtractions before the bracket table.5Delaware Code Online. Delaware Code Title 30 Chapter 11 – Personal Income Tax
The common addition is interest from bonds issued by other states or their municipalities. That interest is usually tax-free federally but taxable in Delaware.6Justia. Delaware Code 30 – Modifications
The common subtraction runs the other direction: interest on U.S. government securities like Treasury bonds and savings bonds is excluded from Delaware income, since federal law prohibits states from taxing it. Dividends from mutual funds attributable to U.S. government obligations qualify too.
Deductions and the Personal Exemption Credit
After adjusting income, you pick the Delaware standard deduction or itemized deductions. Delaware’s standard deduction is well below the federal number, so homeowners and anyone with substantial deductible expenses should compare both before choosing.
One rule often missed: Delaware lets you itemize on the state return even if you took the standard deduction federally. You can deduct the itemized amounts you would have been entitled to claim federally, whether or not you actually did.5Delaware Code Online. Delaware Code Title 30 Chapter 11 – Personal Income Tax You can take the larger federal standard deduction and still itemize on your Delaware return.
Taxpayers who are 65 or older or legally blind can add $2,500 to the standard deduction for each qualifying condition, $5,000 if both apply. Joint filers each claim their own. This add-on disappears if you itemize.
Delaware does not grant a personal exemption deduction. Instead, it gives a $110 credit for each exemption you could claim for federal purposes, plus another $110 credit for each person on the return who is 60 or older.7Justia. Delaware Code 30-1110 – Personal Exemptions and Credits The credit cannot exceed the tax otherwise due.
Retirement Income Exclusions
Delaware treats retirees generously, and missing these exclusions is one of the costlier filing mistakes in the state.
If you are 60 or older, you can exclude up to $12,500 of qualifying retirement income, which includes pensions, 401(k) distributions, and IRA withdrawals.8Division of Revenue – State of Delaware. Personal Income Tax FAQs Under 60, the exclusion drops to $2,000 and applies only to pension income from an employer, the federal government, or the state.
Military pensions get their own treatment. Under Senate Bill 201, the military pension exclusion rises to $25,000 for tax years beginning on or after January 1, 2026. It applies regardless of age, and it is claimed as the greater of the regular pension exclusion or the $25,000 military amount. “Military pension” covers any pension received from service in the U.S. armed forces, including the National Guard.9Delaware General Assembly. Senate Bill 201
Social Security and Railroad Retirement benefits are fully exempt from Delaware tax. Do not include them in your Delaware taxable income even if some portion was taxable on your federal return.
Credits That Reduce the Bill Directly
Credits cut your tax dollar-for-dollar instead of just lowering taxable income, which makes them worth more than deductions of the same size.
Delaware residents who paid income tax to another state on income earned there can claim a credit against Delaware tax for the amount paid elsewhere.5Delaware Code Online. Delaware Code Title 30 Chapter 11 – Personal Income Tax The credit is capped at the Delaware tax on the out-of-state income, so it will not shelter income earned entirely within Delaware. It matters most for people commuting to Maryland, Pennsylvania, or New Jersey.
Delaware’s earned income tax credit equals 20% of the federal EITC.10Internal Revenue Service. States and Local Governments With Earned Income Tax Credit It is nonrefundable, so it can zero out your tax but will not generate a refund by itself.
The child and dependent care credit is 50% of the federal credit you claimed for the same year.11Justia. Delaware Code 30-1114 – Child Care and Dependent Care Expense Credit It is nonrefundable. For spouses filing separately in Delaware who filed jointly on their federal return, the credit applies only against the tax of the spouse with the lower taxable income.
Active members of a Delaware volunteer fire, ambulance, or rescue company, including auxiliary members, can claim a $1,000 nonrefundable credit.12Justia. Delaware Code 30-1113 – Credit for Active Members of Volunteer Fire, Ambulance, or Rescue Service Companies The Division of Revenue verifies active status with the companies each year.
Filing, Extensions, and Payment
Returns are due the thirtieth day of the fourth month after the close of the tax year, April 30 for calendar-year filers.13Justia. Delaware Code 30-1168 – Time and Place for Filing Returns and Paying Tax You can file through the Delaware Taxpayer Portal, through commercial tax software that supports Delaware, or by mail. Attach your W-2s and any 1099-Rs so withholding credits can be verified. Paper returns have different mailing addresses for refund returns and payment returns.
If you cannot file by April 30, request an automatic extension through the Division’s online portal. The extension buys time to file, not time to pay. If you expect to owe, estimate the amount and send payment by April 30 to avoid penalties and interest on the balance.14Delaware Division of Revenue. Delaware Form 200-V Individual Electronic Filer Payment Voucher Instructions
Pay through the portal by bank transfer or credit card. Card payments carry a processor fee. If you e-filed but want to mail a check, send it with Form 200-V so the payment matches your return. Make checks payable to the Delaware Division of Revenue. If you are owed money, the Division’s online refund tool returns status when you enter your Social Security number and the exact whole-dollar refund amount.15Delaware Division of Revenue. Check Refund Status E-filed returns usually appear within a few business days; paper takes longer.
Estimated Payments During the Year
If you have income not subject to Delaware withholding, such as self-employment earnings, rental income, or investment gains, you may owe quarterly estimated tax. The requirement starts if you expect to owe more than $800 after withholding.16Delaware Division of Revenue. Declaration of Estimated Income Tax for Individuals Installments are due April 30, June 15, September 15, and January 15 of the following year. You can pay the full estimate with the first installment if you prefer.
You generally avoid an underpayment penalty if you paid at least the smaller of 90% of the current year’s tax or 100% of the prior year’s tax through withholding and estimated payments combined. If your prior-year adjusted gross income was over $150,000 ($75,000 for married filing separately), the prior-year safe harbor rises to 110%.17Delaware Division of Revenue. Delaware Underpayment of Estimated Taxes Instructions You also avoid the penalty if your tax minus credits is under $800, or if you were a part-year resident during the year.
Penalties and Interest for Late or Unpaid Tax
Delaware runs separate penalties for filing late, paying late, and underpaying estimated tax. They stack when more than one applies.
- Late filing: 5% per month of the balance due, when the return is filed after April 30 without a valid extension.8Division of Revenue – State of Delaware. Personal Income Tax FAQs
- Late payment: 1% per month of unpaid tax, up to 25%. Applies even if the return was filed on time.
- Interest: 0.5% per month on unpaid tax, compounded monthly, from the original due date until paid.18Justia. Delaware Code 30-533 – Interest on Underpayment
- Estimated tax: 1.5% per month of any required installment that was not made on time.
The Division can waive the estimated tax penalty if the underpayment resulted from a casualty, disaster, or other unusual circumstance, or if you retired after age 62 or became disabled during the current or prior tax year.17Delaware Division of Revenue. Delaware Underpayment of Estimated Taxes Instructions