Delaware State Income Tax 2023 - 2024
Delaware has a well-regarded body of corporate law and a tax structure that attracts corporations to the state. The state's taxes, including Delaware Income Tax on individuals, are among the nation's lowest.
Despite having some of the lowest property taxes in the nation, Delaware still has to pay its fair share of state and local taxes. In particular, individuals have to pay a hefty tax on their incomes. These taxes can easily eat into an individual’s budget. Luckily, some strategies can help them lower their tax bills. Delaware has a tax rate ranging from 2.2% to 5.55% on income under $60,000. The maximum income tax rate is 6.60% on income of $60,000 or over.
The state of Delaware has an income tax that is levied on individuals who earn ordinary income. This is typically the money you receive from your paycheck or the profits you make as a business owner. It also includes things like investment dividends, interest, and royalties. Ordinary income is different from other types of income, such as long-term capital gains or qualified dividends, which may get special tax treatment.
Delaware State Income Tax Due Date
If you’re a Delaware resident, your income tax returns are due April 30 (or by the last day of the 4th month after your taxable year for fiscal year filers). Individuals can get an extension on their filing deadline if they submit Form 4868 or another federal form that extends their time to file. However, this does not extend the deadline for paying your taxes.
Nonresidents: Individuals who do not reside in Delaware must file a return if they earned income from sources inside the state. This includes individuals who earn income as freelancers, independent contractors, or by winning a lottery. Nonresident military personnel who maintain a place of abode in the state or spend more than 183 days here should also file a return.
Corporations: Businesses incorporated in Delaware must pay an annual Franchise Tax. This is a flat fee that’s charged on gross revenue, and it’s usually paid by corporations rather than by their customers. If a C Corporation does not make its payment by March 1, it will face a $200 late penalty and 1.5% monthly interest.
Delaware Income Tax Deductions
Unlike the federal income tax, which has different brackets for single and married filers, Delaware has one marginal rate that applies to all earnings. In addition, the state has several tax deductions that can be used to reduce the amount of taxes paid. These include a personal credit equal to $110 for each exemption claimed on your federal return, a credit for historic preservation, and a volunteer firefighter tax credit.
