Bottom Line
Middle-Class Families: Most Tax-Friendly (Go to the Kiplinger Tax Map for Middle-Class Families)
Retirees: Most Tax-Friendly (Go to the Kiplinger Tax Map for Retirees)
Sales taxes can't get any lower than they are in The First State – because there are none. So, you can shop 'til you drop in Delaware without paying a single penny of sales tax on your purchases.
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Also, when it comes to property taxes, Delaware has the sixth-lowest median property tax rate in the nation.
The only potential downside – and it really isn't that bad – are middle-of-the-road income taxes if you have an above-average income. The state's top income tax rate is 6.6%, and it hits anyone with more than $60,000 of taxable income.
Delaware Income Taxes
Delaware Income Tax Range
Low: 2.2% (on taxable income from $2,001 to $5,000)
High: High: 6.6% (on taxable income above $60,000)
Wilmington also imposes a city tax on wages.
Delaware Taxation of Social Security Benefits
Social Security benefits are not taxed by the state.
Delaware Tax Breaks for Other Retirement Income
Taxpayers age 60 and older can exclude up to $12,500 of pension and other retirement income. Eligible retirement income includes dividends, capital gains, interest, net rental income from real property and qualified retirement plans (e.g., IRAs, 401(k) plans, Keogh plans, and government deferred compensation plans).
Taxpayers under age 60 can exclude up to $2,000 of pension and other retirement income, except that up to $12,500 from a military pension can be excluded.
Railroad Retirement benefits are also exempt.
Delaware Sales Tax
No state or local sales tax.
Delaware Real Property Taxes
In Delaware, the median property tax rate is $568 per $100,000 of assessed home value.
Delaware Property Tax Breaks for Retirees
Homeowners 65 and older can get a credit equal to half of school property taxes, up to $400. However, residents who moved to Delaware after January 1, 2018, cannot receive the credit until they have lived in the state for ten consecutive years. If both people in a married household are 65 or older, only one school tax credit will be given to the household per year. If only one member is 65 or older, that person may still apply for the full tax credit. Additional exemptions for senior citizens are available, but they vary by county.
Delaware Motor Fuel Taxes
Gasoline: 23¢ per gallon.
Diesel: 22¢ per gallon.
Delaware Sin Taxes
Cigarettes: $2.10 per pack
Snuff: $0.92 per ounce
All other tobacco products: 30% of the wholesale price
Vapor products: $0.05 per ml
Beer: $0.26 per gallon
Wine: $1.63 per gallon
Liquor: $4.50 per gallon
Delaware Estate and Inheritance Taxes
No estate or inheritance tax.
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