Delaware Franchise Tax Deadline
While Delaware Franchise Tax and Annual Report filings are technically due by March 1, Delaware grants an automatic extension until June 1—but many founders don’t know this. Miss both deadlines? That’s when real penalties kick in.
In this blog, we explain what happens after the March 1 deadline, how the grace period works, and what you must do by June 1, 2025, to avoid losing your corporation’s good standing.
Relevant IRC Codes & Definitions
While the filing itself is handled at the state level, there are relevant IRS implications:
- IRC §162 – Franchise Taxes and penalties may be deductible if ordinary and necessary.
- IRC §6651 – Discusses federal late filing penalties (for comparison).
- IRC §263 – Explains when costs like penalties must be capitalized vs. expensed.
IRS & State Form References
IRS Forms:
- Form 1120 – U.S. Corporation Income Tax Return
- Franchise Tax and penalties reported as business expenses (when allowed)
Delaware Filings:
- March 1, 2025 – Initial Franchise Tax and Annual Report deadline
- June 1, 2025 – Last day of automatic grace period
- Post-June 1:
- $200 late fee
- 1.5% monthly interest on unpaid tax
- Loss of good standing
Real-World Example
Case Study:
Synthex Labs, a startup C Corporation, received its first Franchise Tax notice and assumed it was optional due to lack of revenue. The founder ignored the March 1 deadline and the June 1 grace period.
Outcome:
- Filed in July
- Incurred $200 late fee
- Owed 3 months of 1.5% interest
- Lost good standing
- Was disqualified from applying for a state startup incentive grant
Lesson: Delaware deadlines matter—even without revenue.
Step-by-Step: What to Do If You Miss the March 1 Deadline
- Do not panic – You have until June 1, 2025, to file without penalty
- Log into Delaware’s online portal and file your Annual Report + Franchise Tax
- Use the Assumed Par Value Method if you have high authorized shares
- If June 1 passes, file immediately and pay:
- $200 penalty
- Accrued interest
- Request a Certificate of Good Standing if required for investors or grant programs
- Ensure next year’s filing is calendared early
Conclusion
Missing the March 1 Delaware Franchise Tax deadline isn’t fatal—but ignoring the June 1 grace period can damage your reputation, slow down funding, and rack up costs. The key is simple: file by June 1, 2025, using the correct method and submit both the Annual Report and Franchise Tax together.
Call to Action
Missed the March 1 filing and don’t know your next move?
👉 Schedule a filing rescue call with Anshul Goyal, CPA, and we’ll fix your 2025 Delaware filings, calculate penalties, and restore your business status fast.
Disclaimer
This article is for informational purposes only and does not constitute legal, tax, or financial advice. Delaware automatically extends the March 1 deadline until June 1. Penalties and interest apply only after that. Startups must act before June 1 to retain full compliance and access to corporate privileges.
Anshul Goyal, CPA EA FCA, is a U.S.-licensed CPA, IRS Enrolled Agent, and Chartered Accountant (India). He represents startup founders, SaaS C Corporations, and Delaware-registered businesses in meeting their federal and state filing deadlines accurately and efficiently.
FAQs (Top 5 High-Searched)
Q1. Is March 1 a hard deadline for Delaware Franchise Tax?
A1. No. Delaware grants an automatic extension until June 1 without penalty.
Q2. What happens if I file after June 1?
A2. You’ll incur a $200 penalty plus 1.5% monthly interest on the tax due.
Q3. Will my company be shut down?
A3. Not immediately, but your corporation will be marked “Not in Good Standing” and may be administratively dissolved if ignored for too long.
Q4. Can I get a Certificate of Good Standing after filing late?
A4. Yes, once all taxes, reports, and penalties are cleared.
Q5. Does this affect my federal tax return?
A5. Not directly, but any state tax or penalty may be reflected on Form 1120 if deductible.
About Our CPA
Anshul Goyal, CPA EA FCA, is a U.S. Certified Public Accountant, IRS Enrolled Agent, and Chartered Accountant (India). With more than 2,000 clients served and $200 million in tax savings achieved, he helps founders manage both their Delaware and IRS compliance obligations—on time, every time.