Taxes in Delaware: State Tax Guide 2026
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Taxes in Delaware: State Tax Guide 2026
Tax information is for educational purposes only and does not constitute tax advice. Consult a licensed tax professional for your specific situation.
Delaware is widely considered one of the most tax-friendly states in the country thanks to its complete absence of sales tax. While the state does impose a progressive income tax with a top rate of 6.60%, the lack of sales tax, relatively low property taxes, and business-friendly corporate laws make it an attractive place for residents and businesses alike.
Delaware Income Tax Rates (2026)
Delaware uses a progressive income tax system with seven brackets. Rates below are for all filers:
| Tax Rate | Taxable Income Range |
|---|---|
| 0.00% | $0 – ~$2,000 |
| 2.20% | ~$2,001 – ~$5,000 |
| 3.90% | ~$5,001 – ~$10,000 |
| 4.80% | ~$10,001 – ~$20,000 |
| 5.20% | ~$20,001 – ~$25,000 |
| 5.55% | ~$25,001 – ~$60,000 |
| 6.60% | Over ~$60,000 |
Delaware uses the same brackets for all filing statuses. Married couples filing jointly do not receive doubled thresholds.
Delaware Standard Deduction (2026)
| Filing Status | Amount |
|---|---|
| Single | ~$3,250 |
| Married Filing Jointly | ~$6,500 |
| Head of Household | ~$3,250 |
Delaware also allows a personal credit of ~$110 per exemption, which reduces your tax liability directly.
Notable Delaware Tax Credits
- Earned Income Tax Credit: Delaware offers a state EITC worth ~20% of the federal credit
- Child Care Credit: Credit for child and dependent care expenses
- Volunteer Firefighter Credit: ~$500 credit for active volunteer firefighters and ambulance company members
- Land Conservation Credit: Credit for landowners who place land in permanent conservation easements
- Historic Preservation Credit: Credits for qualified rehabilitation of historic properties
Sales Tax
| Component | Rate |
|---|---|
| State rate | 0.00% |
| Local rate | 0.00% |
| Combined rate | 0.00% |
Delaware has no sales tax at any level. This is one of only five states with no statewide or local sales tax. Residents and visitors pay zero sales tax on all purchases, from groceries to electronics to automobiles.
However, Delaware does impose a Gross Receipts Tax on businesses, which functions as a tax on business revenue rather than on consumer purchases. Rates range from 0.0945% to 2.0736% depending on the business activity. This cost is sometimes passed through to consumers in the form of higher prices.
Property Tax
| Metric | Amount |
|---|---|
| Average effective rate | ~0.53% |
| National average | 0.99% |
Delaware has one of the lowest property tax rates in the nation. Property taxes are assessed at the county level, and the state has not reassessed property values since 1983 in some counties, keeping taxable values well below market value.
Exemptions
- Senior School Property Tax Credit: Homeowners 65+ are exempt from the school portion of property taxes on their primary residence
- Homestead exemption: Not available statewide, but some jurisdictions offer local exemptions
- Disabled veteran exemption: Full exemption for veterans with 100% disability rating
Example: A home with a market value of $350,000 at the ~0.53% effective rate pays approximately ~$1,855 in annual property taxes — roughly half the national average for a home of similar value.
How Delaware Compares to National Averages
| Tax Type | Delaware | National Average |
|---|---|---|
| Top income tax rate | 6.60% | ~5.0% |
| Effective rate (~$75K single) | ~5.2% | ~3.5% |
| Sales tax (combined avg) | 0.00% | 6.6% |
| Property tax (effective) | ~0.53% | 0.99% |
| Overall tax burden rank | Below average | — |
Who Benefits from Living in Delaware
Delaware may work well for:
- Frequent shoppers — Zero sales tax means substantial savings on major purchases like cars, furniture, and electronics
- Retirees — Social Security is tax-free, persons 60+ receive a ~$12,500 pension exclusion, and seniors are exempt from school property taxes
- Homeowners — Very low property tax rates, particularly beneficial for those with high-value homes
- Business owners — No sales tax, favorable corporate laws, and the Court of Chancery specializes in business disputes
- Lower-income earners — First ~$2,000 of income is tax-free and the state EITC supplements the federal credit
Delaware may be costly for:
- High earners — The 6.60% top rate kicks in at just ~$60,000, which is a low threshold compared to most states
- Dual-income households — No married-filing-jointly bracket doubling means couples reach the top rate quickly
- Commuters working in other states — Delaware residents working in Pennsylvania, Maryland, or New Jersey may owe taxes in those states (though reciprocity agreements exist with some)
Delaware-Specific Considerations
- No tax on Social Security benefits — Delaware fully exempts Social Security income from state tax
- Pension/retirement exclusion — Taxpayers 60+ can exclude up to
$12,500 of pension and eligible retirement income ($25,000 for couples filing jointly) - No state estate tax — Delaware repealed its estate tax in 2018
- Gross Receipts Tax — Businesses pay this in lieu of a sales tax; rates vary by activity type
- Incorporation haven — Over 60% of Fortune 500 companies are incorporated in Delaware due to favorable corporate laws, though this primarily affects business taxation rather than personal
- Reciprocal tax agreements — Delaware has agreements with Pennsylvania and Maryland to prevent double taxation of commuters
Key Takeaways
- Delaware has no sales tax at any level, making it one of only five states with this distinction
- The progressive income tax tops out at 6.60%, but the threshold is relatively low at ~$60,000
- Property taxes are among the lowest in the nation at ~0.53% effective rate
- Retirees benefit from tax-free Social Security, a generous pension exclusion, and senior property tax relief
- No state estate tax and no inheritance tax provide additional financial planning benefits
- The Gross Receipts Tax on businesses partially offsets the absence of a sales tax
Next Steps
- See how Delaware compares at State Income Tax Comparison: All 50 States Ranked
- Calculate your federal bracket with the Tax Bracket Calculator 2026
- Explore deductions available to you — Tax Deductions You’re Probably Missing (Itemized vs Standard)
- Find a Delaware CPA — Find a CPA Near You
- Consider tax-efficient strategies — Tax Planning Consultation