Overview of Delaware Taxes
Delaware has some of the lowest taxes in the country. There is no statewide sales tax, and property taxes are some of the lowest in the nation. There is a progressive income tax for the state with a top rate of 6.6%, which is slightly above average nationally.
Number of State Personal Exemptions
Your Income Taxes Breakdown
|Tax Type||Marginal |
|Total Income Taxes|
|Income After Taxes|
* These are the taxes owed for the 2020 - 2021 filing season.
Your 2020 Federal Income Tax Comparison
- Your marginal federal income tax rate
- Your effective federal income tax rate
- Your federal income taxes
Total Estimated 2020 Tax Burden
Total Estimated Tax Burden $
Percent of income to taxes = %
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Our income tax calculator calculates your federal, state and local taxes based on several key inputs: your household income, location, filing status and number of personal exemptions. Also, we separately calculate the federal income taxes you will owe in the 2020 - 2021 filing season based on the Trump Tax Plan.
How Income Taxes Are Calculated
- First, we calculate your adjusted gross income (AGI) by taking your total household income and reducing it by certain items such as contributions to your 401(k).
- Next, from AGI we subtract exemptions and deductions (either itemized or standard) to get your taxable income. Exemptions can be claimed for each taxpayer as well as dependents such as one’s spouse or children.
- Based on your filing status, your taxable income is then applied to the the tax brackets to calculate your federal income taxes owed for the year.
- Your location will determine whether you owe local and / or state taxes.
- Last Updated: January 1, 2021...read more
When Do We Update? - We regularly check for any updates to the latest tax rates and regulations.
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- 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.
Taxes in Delaware
Delaware State Tax Quick Facts
- Income tax: 0% - 6.6%
- Sales tax: None
- Property tax: 0.56% average effective rate
- Gas tax: 23 cents per gallon of regular gasoline, 22 cents per gallon of diesel
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 shoppers. It also has some of the lowest property taxes around, as Delaware’s effective property tax rate of 0.56% ranks as one of the 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 tax bracket.
A financial advisor in Delaware can help you understand how taxes fit into your overall financial goals. Financial advisors can also help with investing and financial plans, including retirement, homeownership, insurance and more, to make sure you are preparing for the future.
Delaware Income Taxes
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%|
Delaware's adjusted gross income (AGI) is very similar to federal AGI, but with a few differences. The largest difference is the state’s treatment of retirement income. Social Security income is not taxable in Delaware and it 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 deduction rules, 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 on your federal taxes.
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: This is available in varying amounts 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 6.6%. This rate applies to the gain less any selling expenses.
Delaware Sales Tax
There is no sales tax in Delaware.
Delaware Property Tax
Property taxes in Delaware are among the lowest in the U.S. The state’s average effective property tax rate is just 0.56%. The average homeowner in Delaware pays $1,470 annually in property taxes.
If those rates have you thinking of purchasing a vacation home or a full-time residence in Delaware, read our Delaware mortgage guide for information on rates and getting a mortgage in the First State. There’s also valuable information for any current Delaware residents thinking of refinancing their home.
Delaware Cigarette Tax
Delaware charges a tax of $2.10 per pack of 20 cigarettes. Wholesalers pay a 30% tax on other tobacco products, including cigars and chewing tobacco, when they bring them into the state of Delaware.
Delaware Alcohol Tax
While there is no sales tax collected on purchases of alcohol in Delaware, some excise taxes still apply. These are generally close to or lower than national averages, however. The tax on beer is 26 cents a gallon. The tax on liquor is $4.50 per gallon.
Delaware Estate Tax
As of Jan. 1, 2018, there is no estate tax in Delaware. However, any deaths that occurred in 2017 or earlier may still be subject to the estate tax.
For 2017, the tax applied to estates with a value of more than $5.49 million. Above that cutoff, marginal rates began at 0.8% and increased to a top rate of 16%.
Delaware Gas Tax
Drivers in Delaware will need to pay the state’s gasoline excise tax. The state tax on regular gasoline is 23 cents per gallon, which is the 21st-lowest in the country. Diesel fuel is taxed at a rate of 22 cents per gallon, good for 16th-lowest.
- The “12 mile circle” which describes the boundary between Pennsylvania and Delaware is the only circular border between U.S. states.
- The largest cities in Delaware are Wilmington, Dover and Newark.
- The official state bird of Delaware is the Blue Hen Chicken.
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.
To find the places with the lowest tax burdens, SmartAsset calculated the amount of money a specific person would pay in income, sales, property and fuel taxes in each county in the country.
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 after taxes. This balance 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 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 calculate a total tax burden. Finally, each county was ranked and indexed, on a scale of 0 to100. The county with the lowest tax burden received a score of 100 and the remaining counties in the study were scored based on how closely their tax burden compares.