Is There Income Tax in Delaware? Brackets, Residency, and Filing

Yes, Delaware has an income tax. Delaware income tax rates for individuals run on a progressive scale from 2.2% up to 6.6% on income over $60,000, with the first $2,000 taxed at 0%; corporations pay a flat 8.7% on income allocated to the state. Whether any of that actually applies to you depends on where you live, where the income comes from, and what kind of entity is earning it.

Personal Income Tax Brackets

Delaware uses six taxable brackets plus a zero-rate floor. The rates are marginal, so only the income falling inside each band is taxed at that band’s rate.

$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%

Someone earning $70,000 pays 6.6% only on the $10,000 above the $60,000 threshold, not on the full amount. The framework sits under Delaware Code Title 30.

Standard Deduction and Credits

For the 2026 tax year, the standard deduction is $3,250 for single filers and $6,500 for married couples filing jointly. Married filing separately is $3,250 each. If you or your spouse are 65 or older, or blind, add $2,500 per qualifying person.¹ You can itemize instead, generally following the categories from your federal return.

Several credits reduce the tax you owe directly:

Personal credit of $110 for each personal exemption claimed on your federal return.²
Volunteer first responder credit of $1,000, nonrefundable, for active members of a Delaware volunteer fire, ambulance, or rescue company.³
Child and dependent care credit worth 50% of the corresponding federal credit.
Earned income tax credit: choose either 20% of the federal credit (nonrefundable) or 4.5% of the federal credit with any excess above your liability refunded.⁴
Credit for income tax paid to another state on the same income.
Credit for qualifying expenses tied to living organ or bone marrow donations.

That earned income credit choice is worth thinking through. The 20% option is larger but can only wipe out tax you already owe. The 4.5% option is smaller but refundable, so it can put money back in your pocket if it exceeds your liability. If your tax bill is low or zero, the refundable version usually wins.

Social Security, Pensions, and Military Retirement

Social Security benefits are fully exempt from Delaware income tax and should not be included in your state taxable income.⁵

Other pension and retirement income gets a partial exclusion that depends on age. For 2026:

Under age 60: exclude up to $2,000 in pension income from employers or government sources.
Age 60 or older: exclude up to $12,500 in pension income or other eligible retirement income, including 401(k) distributions, 457 plan distributions, dividends, capital gains, interest, and net rental income.

Military pensions are treated more generously. Starting in 2026, all military pension recipients can exclude up to $25,000 regardless of age, the end point of a phased increase that reaches its full level for the 2026 tax year.⁶ You take the greater of the general exclusion or the military exclusion; you don’t stack both.

Who Counts as a Delaware Resident

Residency drives what income Delaware can tax. Two tests apply. You are a resident if you are domiciled in Delaware during any part of the tax year. You are also a resident if you keep a place to live in Delaware and spend more than 183 days there during the year.⁷

There is one carve-out for extended time abroad. If you spend at least 495 full days in a foreign country over any 18 consecutive months, don’t keep a Delaware home where family members stay more than 45 days, and aren’t present in Delaware for more than 45 days during that period, Delaware won’t treat you as a resident even if you are technically domiciled there. This exception does not apply to federal employees or military members.

Part-year residents (people who moved in or out during the year) and non-residents who earn Delaware-source income still owe tax on the Delaware portion.

The Wilmington City Wage Tax

Working or living in Wilmington adds one more layer. The city imposes a 1.25% wage tax on earned income, applied to both residents and non-residents who work within city limits. If your workplace is in Wilmington, your employer will withhold it. This is the only local income tax in Delaware.

Corporate Income Tax

Corporations doing business in Delaware pay a flat 8.7% tax on federal taxable income allocated and apportioned to the state.⁸ Every domestic or foreign corporation doing business in the state must file a return, even in a year with no taxable income.

Interstate businesses apportion income to Delaware based solely on the ratio of Delaware gross receipts to total U.S. gross receipts. Whether the tax applies at all comes down to nexus: a sufficient connection to Delaware. Owning or leasing property in the state, employing people there, keeping an administrative office, or generating significant gross receipts from Delaware customers can each create nexus.

Delaware’s franchise tax on entities incorporated in the state is a separate obligation from the corporate income tax and applies whether or not the entity does business or earns income in Delaware.

S-Corporations and Partnerships

Delaware honors the federal S-corporation election. The 8.7% corporate rate does not apply to the S-corp’s pass-through income; instead the income flows to shareholders, who report their shares on personal Delaware returns.⁸ An S-corp with Delaware-source income still has to file an S-Corporation Reconciliation and Shareholders Information Return, and it must make estimated personal income tax payments on behalf of non-resident shareholders. Resident shareholders handle their own estimated payments.

Partnerships work similarly. The entity files an informational return, and the partners pick up their shares on their personal returns.

Filing Deadlines and Extensions

Delaware’s personal income tax return is due April 30, two weeks after the federal April 15 deadline.⁹ Corporate income tax returns for calendar-year filers are due April 15.⁸ S-corporation and partnership informational returns generally follow federal deadlines, which fall earlier.

You can request an automatic extension to October 15 by filing the Extension Request Voucher (Form PIT-EXT) by the original April 30 due date.¹⁰ The extension only buys time to file, not time to pay. Interest and penalties on unpaid tax start accruing from April 30 regardless.

Estimated Tax Payments

If you’re self-employed or have income that isn’t subject to withholding, you likely owe quarterly estimated payments. Delaware requires them when the tax you expect to owe after withholding exceeds $800 for the year.¹

The quarterly due dates are April 15, June 15, September 15, and January 15 of the following year. Notice that the first installment for the current tax year is due before your prior-year return.

You avoid an underpayment penalty if each installment is paid on time and covers at least 90% of the current year’s tax or 100% of the prior year’s tax (110% if your prior-year federal adjusted gross income exceeded $150,000). If you had zero tax liability for a full 12-month prior year, estimated payments aren’t required.¹

Penalties for Late Filing or Underpayment

Delaware’s penalties run concurrently, so being late on filing and payment at once compounds quickly.⁵

Late filing with a balance due: 5% per month of the unpaid balance.
Failure to pay: 1% per month of the net tax owed, capped at 25%, on top of other penalties.
Late or missing estimated payments: 1.5% per month of the computed payment amount.
Interest on underpayment: 0.5% per month from the original due date until paid.

Filing late, not paying, and missing estimated payments can trigger all four charges at the same time. The Division of Revenue can waive the estimated tax penalty when the underpayment stems from a casualty, disaster, or other unusual circumstance, but you have to request the waiver.¹ Forms, instructions, and electronic filing sit on the Division of Revenue site at revenue.delaware.gov.¹¹

1
Delaware Division of Revenue. Declaration of Estimated Income Tax for Individuals 2026 Instructions
2
Justia Law. Delaware Code Title 30 – 1110 Personal Exemptions and Credits
3
Delaware Code Online. Delaware Code Title 30 Chapter 11 Subchapter II
4
Justia Law. Delaware Code Title 30 – 1117 Earned Income Tax Credit
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Division of Revenue – State of Delaware. Personal Income Tax FAQs
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Delaware General Assembly. Senate Bill 201 – Exclusion of Military Pensions From Taxable Income
7
Justia Law. Delaware Code Title 30 – 1103 Resident Individual Defined
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Division of Revenue – State of Delaware. Corporate Income Tax FAQs
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State of Delaware. Delaware’s Tax Season Starts January 26, 2026
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State of Delaware Division of Revenue. Personal Income Tax Forms Current Year
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Department of Finance – State of Delaware. Division of Revenue