Delaware State Tax Guide

Delaware state tax: Overview

You can enjoy making tax-free purchases in Delaware since it is one of the states with no sales tax. The property tax rate in Delaware is relatively low, and the state won't tax income below $2,000.

Delaware's highest income tax bracket is 6.6%, but if you have taxable income greater than $60,000, you will pay the 6.6% rate.

[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.]

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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 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.)

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 0.48%, 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

Delaware tobacco taxes

Source: Sales Tax Handbook

Delaware alcohol taxes

Source: Sales Tax Handbook

Delaware estate and inheritance tax

Delaware is one of the states with no estate or inheritance taxes.

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