Delaware Tax Guide
Explore Delaware's 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
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
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
-
4% and Chill? Find Out If This Distribution Rule Fits Your RetirementTake this simple quiz to discover whether the 4% Rule will work for you in retirement.
-
Oregon Tax Kicker in 2026: What's Your Refund?State Tax The Oregon kicker for 2025 state income taxes is coming. Here's how to calculate your credit and the eligibility rules.
-
Will IRS Budget Cuts Disrupt Tax Season? What You Need to KnowTaxes The 2026 tax season could be an unprecedented one for the IRS. Here’s how you can be proactive to keep up with the status of your return.
-
Oregon Tax Kicker in 2026: What's Your Refund?
State Tax The Oregon kicker for 2025 state income taxes is coming. Here's how to calculate your credit and the eligibility rules.
-
3 Retirement Changes to Watch in 2026: Tax EditionRetirement Taxes Between the Social Security "senior bonus" phaseout and changes to Roth tax rules, your 2026 retirement plan may need an update. Here's what to know.
-
Tax Season 2026 Is Open: 8 Big Tax Changes to Know Before You FileTax Season Due to several major tax rule changes, your 2025 return might feel unfamiliar even if your income looks the same.
-
Do You Pay Property Taxes in Tennessee? What You Need to Know in 2026Property Taxes State lawmakers are moving to ban state property taxes, but can they stop the local rate spike? Here's how 2026 could lower your Tennessee property tax bill.
-
12 Tax Strategies Every Self-Employed Worker Needs in 2026Your Business Navigating the seas of self-employment can be rough. We've got answers to common questions so you can have smoother sailing.
-
New California Wealth Tax for 2026? Here's What's Happening NowState Taxes California has considered taxing wealth before, but the latest proposal seems to be different.
-
A Free Tax Filing Option Has Disappeared for 2026: Here's What That Means for YouTax Filing Tax season officially opens on January 26. But you'll have one less way to submit your tax return for free. Here's what you need to know.
-
Georgia Tax Rebate And Income Elimination? What 2026 Could Mean For YouState Tax We break down how lawmakers aim to axe the state income tax and how much you could get in a Georgia tax refund in 2026.
