Delaware Income Tax Calculator

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 holiday season shopping. It also has some of the lowest property taxes around: Delaware’s effective property tax rate of 0.56% ranks as the fifth 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.

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.

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, 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 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 – 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 6.6%. 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%, fifth lowest of any state in the country. The average homeowner in Delaware pays $1,329 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. That’s the 14th 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 close to or lower than the national averages, however. The tax on beer is 26 cents a gallon, or about 2.4 cents per beer. That’s the 24th highest rate in the U.S. The tax on liquor is $4.50 per gallon, 18th lowest in the country.

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 (unless, of course, you drive an electric vehicle!). 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, ninth 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.