Delaware Tax Guide 2025
Explore Delaware's 2025 state tax rates for income, sales, property, retirement, and more. Learn how Delaware compares nationwide.


Rocky Mengle
Navigating the complexities of state taxes can be daunting, but understanding Delaware's tax landscape is essential for residents and newcomers alike.
In this guide, we'll explore key components of The First State's tax system, from income and sales taxes to property taxes and retirement benefits.
Delaware state tax: Overview
Shopping in Delaware comes with a benefit. There is no sales tax at all, making it one of the few states where you can enjoy shopping tax-free.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Property taxes in Delaware are also fairly low, which is a plus for homeowners. And if your income is under $2,000, you won't pay state income tax.
For those earning more, Delaware’s top income tax rate is 6.6 percent, which applies to income over $60,000. While it is not the lowest in the country, many residents still find the overall tax burden manageable.
[Data for this state tax guide was gathered from several sources including the U.S. Census Bureau, the state’s government website, the Sales Tax Handbook, and the Tax Foundation. Property taxes are cited as a rate percentage rather than the assessed value.]
Delaware income tax
Delaware has a graduate state individual income tax rate ranging from 2.2% to 6.6%, according to the Tax Foundation.
Delaware retirement taxes
Delaware tax on retirement benefits: Delaware does not tax Social Security benefits or Railroad Retirement benefits.
Retirees age 60 and older may exclude up to $12,500 of pension or retirement income from a qualified retirement plan in Delaware. This income includes but is not limited to:
- Interest income
- Capital gains income
- Net rental income
- Income from dividends
(Note: The pension exclusion is limited to $2,000 for taxpayers under 60.)
- Social Security: Not taxable
- Pensions: Partially taxable
- 401(k) and IRA Distributions: Partially taxable
Delaware sales tax
Delaware does not impose state or local sales tax.
How much are property taxes in Delaware?
In Delaware, the average effective property tax rate is 0.5%, which is lower than in most other U.S. states.
Source: Tax Foundation
Delaware Property Tax Breaks for Retirees
Senior Property Tax Credit: Some homeowners can get a property tax credit of up to $500 against school property taxes. Delaware requires homeowners meet certain eligibility criteria to qualify for the credit.
- Homeowners must have paid their entire property tax bill for the prior year.
- The property must be the homeowner's primary residence.
- Homeowners must be 65 or older.
Note: If one spouse is not yet 65, the other spouse may apply for the school property tax credit when the home is jointly owned.
Delaware gas tax
Gasoline | $0.23 per gallon |
Diesel | $0.22 per gallon |
Source: Sales Tax Handbook
Delaware alcohol and tobacco taxes
Product | Tax Amount |
---|---|
Cigarettes | $1.60 per pack |
Other Tobacco Products | 15% of wholesale price |
Medical Marijuana | 0% |
Source: Sales Tax Handbook
Product | Tax Amount |
---|---|
Wine | $0.97 per gallon |
Beer | $0.16 per gallon |
Liquor | $3.75 per gallon |
Source: Sales Tax Handbook
Delaware estate and inheritance tax
Delaware is one of the states with no estate or inheritance taxes.
Related Content
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Katelyn has more than 6 years of experience working in tax and finance. While she specialized in tax content while working at Kiplinger from 2023 to 2024, Katelyn has also written for digital publications on topics including insurance, retirement, and financial planning and had financial advice commissioned by national print publications. She believes knowledge is the key to success and enjoys providing content that educates and informs.
-
What Is a Stockbroker? (And Do I Even Need to Use One?)
Whether or not you need a stockbroker or a financial adviser depends on several factors, including goals, time availability and available cash.
-
Eight Ways to Stay Safe When Making Cashless Payments
Consumers are ditching cash for the convenience of digital payments, but fraudsters are right behind you. Just a few simple steps can help you stay safe.
-
New Tax Rules: Income the IRS Won’t Touch in 2025
Income Taxes From financial gifts to Roth withdrawal rules, here’s what income stays tax-free under the new Trump 2025 tax bill, and some information on what’s changed.
-
Three Popular Tax Breaks Are Gone for Good in 2026
Tax Breaks Here's a list of federal tax deductions and credits that you can't claim in the 2026 tax year. Plus, high-income earners could get hit by a 'surprise' tax bill.
-
Tax Brackets 2025 Quiz: How Much Do You Know?
Quiz Test your knowledge of IRS rules that impact how much money you keep in your wallet.
-
About 40% of Heirs Say They Can’t Afford an Inherited Home
Estate Planning The ‘Great Wealth Transfer’ may not help with high property taxes, soaring homeownership costs, and liquidity issues in 2025.
-
Retirees Face a Growing Capital Gains Tax Trap: What's Next?
Home Sales A changing housing market and unchanged IRS exclusion amounts can add up to a headache for many homeowners. Will Congress offer a fix?
-
New York Inflation Refund Checks Are Coming Soon: What to Know Now
Tax Relief Inflation relief checks are on the way for over 8 million New York taxpayers. Here's a full breakdown of who gets a payment and when you may expect yours.
-
IRS Paper Checks Deadline: What Happens After September 30?
Tax Changes Avoid delays when IRS tax refunds and Social Security paper checks are cut off. Here’s what to know.
-
The Most Tax-Friendly States for Investing in 2025 (Hint: There Are Two)
State Taxes Living in one of these places could lower your 2025 investment taxes — especially if you invest in real estate.