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


Rocky Mengle
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.]

Sign up for Kiplinger’s Free E-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.
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
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

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.
-
Here's Why Walmart Deals are Better Than Amazon Prime Day
With sales for Walmart Deals and Amazon Prime Day running comparable on price, one factor separates them.
-
How to Get Rid of the Things Your Kids Don't Want While Downsizing
Whether moving by necessity or choice, downsizing means deciding what to do with your stuff. Here's what to do if the kids and grandkids don't want it all.
-
Ten Cheapest Places to Live in Virginia
Property Taxes The Commonwealth of Virginia has some cheap places to live. Here are a few if you hate paying property taxes.
-
2025 SALT Cap Could Hurt Top 'Hidden Home Cost'
Tax Deductions The GOP tax bill could make hidden homeowner costs worse for you. Here’s how.
-
Retire in the Bahamas With These Three Tax Benefits
Retirement Taxes Retirement in the Bahamas may be worth considering for high-net-worth individuals who hate paying taxes on income and capital gains.
-
2025 Virginia Tax Rebate Checks Coming Soon? What to Know Now
Tax Rebates Given a historic 2025 gubernatorial race, tax policy will remain a key issue for Virginians in the months ahead.
-
Summer Backyard Ideas With Added Tax Benefits for 2025
Tax Tips Find out how these summer 2025 home projects can help you save on taxes next year.
-
Coverdell ESAs vs. 529 Plans: Which Should You Choose?
Savings Accounts These savings accounts can offer tax benefits for school and retirement expenses. Here’s how.
-
Homeschoolers Could Soon Save on Expenses With 529 Plans
Savings Accounts A new House GOP bill could change how you save for your child's homeschool education. Find out how.
-
Five ‘Big Beautiful Bill’ Tax Changes to Watch in the Senate
Tax Policy The House passed its version of Trump’s "One Big, Beautiful Bill." Here’s what to look for as Senate Republicans take up the mega legislation.