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 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 Income Tax Range
Delaware's income tax brackets are the same for every filing status. The city of Wilmington imposes its own income tax rate.
| Up to $2,000 | 0% |
| $2,001 to $5,000 | 2.2% |
| $5,001 to $10,000 | 3.9% |
| $10,001 to $20,000 | 4.8% |
| $20,001 to $25,000 | 5.2% |
| $25,001 to $60,000 | 5.55% |
| More than $60,000 | 6.6% |
Delaware Sales Tax
Delaware does not impose any state or local sales tax.
How Much Are Property Taxes in Delaware?
In Delaware, the average effective property tax rate is 0.58%, which is lower than in most other U.S. states.
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 Motor Vehicle Taxes
Delaware taxes gasoline at $0.23 per gallon.
Delaware does not impose sales tax or personal property tax on motor vehicles.
Delaware Alcohol and Tobacco Taxes
| Cigarettes | $2.10 per pack |
| Other tobacco products | 30% of wholesale price |
| Vapor products | $0.05 per ml |
| Beer | $0.26 per gallon (rounded to the nearest cent) |
| Wine | $1.63 per gallon |
| Liquor (25% or less ethyl alcohol by volume) | $3.00 per gallon |
| Liquor (More than 25% ethyl alcohol by volume) | $4.50 per gallon |
Delaware Estate and Inheritance Taxes
Delaware is one of the states with no estate or inheritance taxes.
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