Introduction
Delaware has a progressive state income tax system, meaning higher income levels are taxed at higher rates. While the state has no sales tax, residents and some non-residents must pay state income tax based on earnings.
Understanding Delaware’s 2025 tax brackets, deductions, and credits can help taxpayers estimate their tax liability, reduce taxable income, and ensure compliance.
This guide provides a detailed breakdown of Delaware’s 2025 tax rates, filing requirements, and money-saving strategies.
Delaware State Income Tax Brackets & Rates for 2025
Delaware’s income tax rates range from 2.2% to 6.6%, depending on taxable income.
| Taxable Income | Tax Rate |
|---|---|
| Up to $2,000 | 0% |
| $2,001 – $5,000 | 2.2% |
| $5,001 – $10,000 | 3.9% |
| $10,001 – $20,000 | 4.8% |
| $20,001 – $25,000 | 5.2% |
| $25,001 – $60,000 | 5.55% |
| Over $60,000 | 6.6% |
Example Tax Calculation
If your taxable income is $50,000, your Delaware state income tax would be:
- First $2,000 = $0 tax
- Next $3,000 (2.2%) = $66
- Next $5,000 (3.9%) = $195
- Next $10,000 (4.8%) = $480
- Next $5,000 (5.2%) = $260
- Next $25,000 (5.55%) = $1,387.50
- Total tax liability = $2,388.50
Who Needs to File Delaware State Taxes?
You must file a Delaware state tax return if you meet any of the following conditions:
- Full-year residents who earned taxable income.
- Part-year residents who moved into or out of Delaware during the tax year.
- Non-residents who earned income from Delaware sources (e.g., wages from a Delaware employer).
Standard Deduction vs. Itemized Deductions
Standard Deduction for 2025
- Single filers: $3,500
- Married filing jointly: $7,000
Common Itemized Deductions
- Mortgage interest
- Medical expenses exceeding 7.5% of Adjusted Gross Income (AGI)
- Property taxes
- Charitable donations
Delaware State Tax Credits
- Earned Income Tax Credit (EITC) – Based on federal eligibility.
- Elderly Tax Credit – Available for residents over 60 years old.
- Child and Dependent Care Credit – Helps offset childcare expenses.
How to File Delaware State Taxes in 2025
Step 1: Gather Required Documents
- W-2 (for employees)
- 1099-NEC (for freelancers and contractors)
- Form 200-01 (Full-Year Residents)
- Form 200-02 (Part-Year & Non-Residents)
Step 2: Choose a Filing Method
- E-file through Delaware’s tax portal.
- Mail a paper return to the Delaware Division of Revenue.
Step 3: Pay Any Taxes Owed
- Online payment via Delaware’s Division of Revenue.
- Check or money order payable to the “Delaware Division of Revenue.”
Delaware Tax Deadlines & Penalties
- Tax filing deadline: April 15, 2025.
- Late filing penalty: 5% per month (up to 50% of unpaid taxes).
- Late payment penalty: 1% per month on unpaid taxes.
IRS Compliance & Required Forms
- Form 1040 – Federal income tax return.
- Form 200-01 – Delaware resident tax return.
- Form 200-02 – Non-resident tax return.
- Form PIT-RES – Estimated tax payment form for self-employed taxpayers.
Conclusion
Delaware’s progressive tax system means tax rates increase as income rises. Understanding Delaware’s tax brackets, deductions, and credits can help taxpayers reduce tax liability and stay compliant.
For expert tax planning in Delaware, schedule a meeting with our CPA Anshul Goyal by clicking at https://calendly.com/anshulcpa/ now.
Frequently Asked Questions (FAQs)
1. How is Delaware state income tax calculated?
Delaware uses a progressive tax system with rates ranging from 2.2% to 6.6%.
2. Does Delaware tax Social Security benefits?
No, Delaware does not tax Social Security benefits.
3. What is the Delaware standard deduction for 2025?
The standard deduction is $3,500 for single filers and $7,000 for married couples filing jointly.
4. Can I itemize deductions on my Delaware tax return?
Yes, if you itemize deductions on your federal return, you can also itemize on your Delaware return.
5. Should I hire a CPA for my Delaware state taxes?
Yes, a CPA helps with tax filing, deduction optimization, and IRS compliance.
About Our CPA
Anshul Goyal, CPA EA FCA is a licensed Certified Public Accountant and an IRS Enrolled Agent (EA). He specializes in Delaware tax planning, state tax compliance, and business tax strategies.
Schedule a consultation today with Anshul Goyal, CPA, to optimize your Delaware tax strategy.