Overview of Delaware Taxes
Delaware has some of the lowest taxes in the country. There is no statewide sales tax and property taxes are 4th lowest in the nation. There is a progressive income tax for the state.
Number of Personal Exemptions
Your Income Taxes Breakdown
|Tax Type||Marginal |
|2018 Trump Taxes*|
|Total Income Taxes|
|Income After Taxes|
* These will be the taxes owed for the 2018 - 2019 filing season.
Under the Trump Tax Plan (2018-2019 filing season), your Federal Income Tax will be and your FICA will be .
Changes to Your Federal Income
Taxes Under the Trump Tax Plan
- Your marginal federal income tax rate will
- Your effective federal income tax rate will
- Your federal income taxes will
Total Estimated Tax Burden
Total Estimated Tax Burden $
Percent of income to taxes = %
- Our Tax Expert
Jennifer Mansfield, CPA Tax
Jennifer Mansfield, CPA, JD/LLM-Tax, is a Certified Public Accountant with more than 30 years of experience providing tax advice. SmartAsset’s tax expert has a degree in Accounting and Business/Management from the University of Wyoming, as well as both a Masters in Tax Laws and a Juris Doctorate from Georgetown University Law Center. Jennifer has mostly worked in public accounting firms, including Ernst & Young and Deloitte. She is passionate about helping provide people and businesses with valuable accounting and tax advice to allow them to prosper financially. Jennifer lives in Arizona and was recently named to the Greater Tucson Leadership Program.
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Delaware state tax quick facts
Delaware’s state and local taxes are among the lowest in the nation. There is no state sales tax in Delaware, which makes it a popular place for holiday season shopping. It also has some of the lowest property taxes around. Delaware’s effective property tax rate of 0.54% ranks as the fourth lowest in the country. The most significant tax is the state income tax, with rates ranging from 0% for low earners to 6.6% for earners in the top income tax bracket.
Delaware Income Tax
The state of Delaware collects income taxes based on seven tax brackets, with rates ranging from 0% to 6.6%. Additionally, the city of Wilmington collects its own income tax, at a flat rate of 1.25%. For everyone who does not live or work in Wilmington, however, only the state tax is due. The table below shows tax brackets and rates for the Delaware income tax. Brackets are the same for all filing statuses.
Income Tax Brackets
|Delaware Taxable Income||Rate|
|$0 - $2,000||0.00%|
|$2,000 - $5,000||2.20%|
|$5,000 - $10,000||3.90%|
|$10,000 - $20,000||4.80%|
|$20,000 - $25,000||5.20%|
|$25,000 - $60,000||5.55%|
A Delaware income tax return must be filed by any Delaware resident with a Delaware adjusted gross income (AGI) of $9,400 or more for single filers or married persons filing separately or $15,450 or more for joint filers. Delaware AGI is very similar to federal AGI. If you are looking to find some help on your taxes, consider tax preparation software like Credit Karma and TurboTax to help file your return.
The largest difference between Delaware AGI and federal AGI is the state’s treatment of retirement income. Social Security income is not taxable in Delaware and can be subtracted from income, as can eligible income from a pension, up to a maximum of $2,000. Income from U.S. obligations (like U.S. Savings Bonds) can also be subtracted.
Itemized deductions in Delaware adhere to federal itemized deductions, and you can only claim itemized deductions if you did so on your federal tax return. The amount claimed on your federal return will be equal to the amount on your Delaware return, with a few small differences. For example, the credit for state and local taxes must be subtracted from the total if you claimed it.
It you did not itemize deductions federally, then you can claim the Delaware standard deduction. That is $6,500 for joint filers and $3,250 for all other filers. For filers claiming the standard deduction, additional deductions of $2,500 may be claimed if either they or their spouse is 65 or older or blind.
Delaware Tax Credits
There are a number of income tax credits in Delaware that can be used to lower your total tax bill. The most significant is the personal credit, which is equal to $110 for every exemption claimed on your federal income tax return. So, for example, if you have exemptions for yourself, your spouse and two dependents, you would have a total personal credit of $440 (4 x $110). Additional credits of $110 may be claimed if you or your spouse is 60 or over.
Other commonly claimed credits include:
- The Child Care Credit – 50% of the federal credit
- The Earned Income Tax Credit – 20% of the federal credit
- The Volunteer Firefighter’s Credit – $400 for active volunteer firefighters
- Historic Preservation Tax Credit – available to residents who “promote community revitalization and restoration, and the rehabilitation of historic properties,” as certified by the Delaware State Historic Preservation Office
Delaware Capital Gains Tax
Most capital gains in Delaware are taxable at the full personal income tax rates listed above. This applies to both long- and short-term capital gains. However, gains realized from real estate sales in Delaware by those who live in another state, are taxed at a rate of 6.75%. This rate applies to the gain less any selling expenses.
Delaware Sales Tax
Shoppers rejoice! There is no sales tax in Delaware.
Delaware Property Tax
Property taxes in the First State are among the lowest in the U.S. Delaware’s average effective property tax rate is just 0.54%, fourth lowest of any state in the country. The average homeowner in Delaware pays $1,243 annually in property taxes. Such low property taxes may give you just the reason you’re looking for to buy that beach house in Rehoboth you’ve been dreaming of! But whether you’re looking to purchase a vacation home, a full-time residence or want to learn more about refinancing options, read our Delaware mortgage guide for information on rates and getting a mortgage in the First State.
Calculate Your Property Taxes: Delaware Property Tax Calculator
Delaware Cigarette Tax
As of September 2017, Delaware charges a tax of $2.10 per pack of 20 cigarettes. That’s the 21st highest cigarette tax in the U.S. Other tobacco products, including cigars and chewing tobacco, face a tax rate of 30% of the purchase price.
Delaware Alcohol Tax
While there is no sales tax collected on purchases of alcohol in Delaware, some excise taxes still apply. These are generally lower than the national averages, however. The tax on beer is just 16 cents a gallon, or about 1.5 cents per beer. That’s the 16th lowest rate in the U.S. The tax on liquor is $3.75 per gallon, 15th lowest in the country.
Delaware Estate Tax
In 2015, the Delaware estate tax applies to estates with a value of over $5.49 million. Estates with a value below that amount do not pay estate tax, which means no estate tax will be due on the vast majority of estates. Above that cutoff, marginal rates begin at 0.8% and increase to a top rate of 16%. Estates with a value of more than $15.53 million will pay the top marginal rate (but only on the portion of the estate that exceeds that amount).
Delaware Gas Tax
Drivers in Delaware will need to pay the state’s gasoline excise tax (except, of course, drivers of electric vehicles). The state tax on regular gasoline is 23 cents per gallon, which is the 14th lowest in the country. Diesel fuel is taxed at a rate of 22 cents per gallon, 10th lowest.
Photo credit: ©iStock.com/mdgmorris
Places with the Lowest Tax Burden
Are you curious how your tax burden stacks up against others in your state? SmartAsset’s interactive map highlights the counties with the lowest tax burden. Scroll over any county in the state to learn about taxes in that specific area.
Where you live can have a big impact on both which types of taxes you have to pay each year and how much money you spend on them. SmartAsset calculated the amount of money a specific person would pay in income, sales, property and fuel taxes in each county in the country and ranked the lowest to highest tax burden.
To better compare income tax burdens across counties, we used the national median household income. We then applied relevant deductions and exemptions before calculating federal, state and local income taxes.
In order to determine sales tax burden we estimated that 35% of take-home (after-tax) pay is spent on taxable goods. We multiplied the average sales tax rate for a county by the household income less income tax. This product is then multiplied by 35% to estimate the sales tax paid.
For property taxes, we compared the median property taxes paid in each county.
For fuel taxes, we first distributed statewide vehicle miles traveled down to the county level using the number of vehicles in each county. We then calculated the total number of licensed drivers within each county. The countywide miles were then distributed amongst the licensed drivers in the county, which gave us the miles driven per licensed driver. Using the nationwide average fuel economy, we calculated the average gallons of gas used per driver in each county and multiplied that by the fuel tax.
We then added the dollar amount for income, sales, property and fuel taxes to rank the counties to calculate a total tax burden.