Delaware Tax Guide 2025

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

image of a Delaware state flag on a pole
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Delaware state tax: Overview

Shopping in Delaware comes with a nice perk. There is no sales tax at all, making it one of the few states where you can enjoy truly tax-free purchases. Property taxes are also fairly low, which is a plus for homeowners. And if your income is under $2,000, you will not pay any 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.]

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Delaware income tax

The state of Delaware.

(Image credit: Getty Images)

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:

(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

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Delaware does not impose state or local sales tax.


How much are property taxes in Delaware?

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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

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Gasoline

$0.23 per gallon

Diesel

$0.22 per gallon

Source: Sales Tax Handbook


Delaware alcohol and tobacco taxes

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Delaware tobacco taxes

Product

Tax Amount

Cigarettes

$1.60 per pack

Other Tobacco Products

15% of wholesale price

Medical Marijuana

0%

Source: Sales Tax Handbook

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Delaware alcohol taxes

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.

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Katelyn Washington
Former Tax Writer

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.

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