Delaware Franchise Tax Late Fee
Missed the June 1, 2025 deadline for your Delaware Franchise Tax? You’re not alone. Thousands of startups miss this critical filing each year—sometimes by accident, sometimes due to confusion. But missing the deadline comes at a cost: penalties, interest, and potential loss of good standing.
Here’s what happens after you miss the deadline—and exactly how to cure it fast and legally.
Relevant IRC Codes & Definitions
While penalties and interest are set by Delaware law, the impact is felt on your federal tax return as well:
- IRC §162 – Penalties and interest paid for state business obligations may be deductible under certain conditions.
- IRC §6651 – Covers failure-to-file and failure-to-pay penalties at the federal level (useful for comparison).
- IRC §263A – Certain expenses must be capitalized, but Franchise Tax is generally deductible when properly reported.
IRS & State Form References
Federal Tax Reporting:
- Form 1120 – Reflect late penalties and interest as business deductions (if applicable under IRC §162)
Delaware Penalty Structure:
- Late Filing Fee: $200 flat penalty
- Interest: 1.5% per month (18% annually) on unpaid tax
- Loss of Good Standing: Automatic if not cured within the compliance grace period
- Reinstatement: Pay all dues + file missed reports to restore status
Real-World Example
Case Study:
VoltNode Technologies missed its June 1, 2024, Franchise Tax filing. The founder thought no filing was needed due to zero revenue.
Result by September:
- $400 tax due
- $200 penalty
- $18 monthly interest × 3 months = $54
- Total: $654 + reinstatement efforts
Even worse: the company was marked “Not in Good Standing”, which delayed a seed investment round and nearly voided a government grant application.
Step-by-Step: How to Cure a Missed Delaware Franchise Tax Filing
- Log into the Delaware Franchise Tax portal
- File your missing Annual Report and tax payment
- Pay the $200 penalty and accumulated interest
- Download the updated Good Standing Certificate (if needed for banks or investors)
- Inform your CPA to properly report payments on federal Form 1120
- Monitor for reinstatement (if revoked) – Filing restores status within days
Conclusion
Delaware takes Franchise Tax seriously—and so should you. Even if your startup is pre-revenue, the moment you incorporate, your clock starts ticking. Filing late isn’t the end of the world—but failing to cure it can stall deals, funding, or operations. If you missed the 2025 deadline, act quickly to stop penalties from stacking.
Call to Action
Missed the June 1 filing and unsure what to do next?
👉 Book a penalty cure consultation with Anshul Goyal, CPA, and we’ll restore your Delaware status, calculate your total due, and make sure you’re audit-ready.
Disclaimer
This article is intended for educational purposes only and does not constitute legal or tax advice. Delaware penalties and interest rates may change. Taxpayers must consult with a qualified CPA or legal advisor before making filings or responding to compliance notices.
Anshul Goyal, CPA EA FCA, is a U.S.-licensed Certified Public Accountant, IRS Enrolled Agent, and Chartered Accountant in India. With over 2,000 clients helped, Anshul specializes in state compliance, tax resolution, and IRS representation for U.S. and global founders. He offers full Delaware restoration services for missed Franchise Tax filings.
FAQs (Top 5 High-Searched)
Q1. What is the penalty for missing Delaware Franchise Tax?
A1. A $200 late fee plus 1.5% monthly interest on the unpaid tax.
Q2. Can my C Corporation be dissolved for nonpayment?
A2. Yes. If not resolved, the state can revoke your good standing or even administratively dissolve the company.
Q3. Will I lose access to my EIN or bank accounts?
A3. No, but you may be blocked from applying for credit, grants, or capital until you reinstate.
Q4. Can I file a late Franchise Tax online?
A4. Yes. Delaware’s portal allows backfiling, payment of penalties, and instant confirmation.
Q5. Can penalties be reduced or waived?
A5. Rarely. Delaware applies penalties strictly. However, accurate reporting and proactive CPA support can prevent them.
About Our CPA
Anshul Goyal, CPA EA FCA, is a U.S.-licensed CPA, IRS Enrolled Agent, and Chartered Accountant (India). He provides penalty resolution and tax strategy services for startup founders with Delaware C Corporations and Series LLCs. Anshul has helped companies cure over $5M in late fees and regain active status before funding deadlines.