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Delaware is the second-smallest state in the country, but it has some outsized tax breaks for those who work, live and pay taxes in the state.
Here are things to know about when and how to file your tax return in the First State, and what to do if you can’t meet the deadlines.
The basics of Delaware state tax
If you’ve ever filed a federal tax return, you may be familiar with most of Delaware’s tax deductions and credits. But the state’s tax rates and deadlines are different from those of the IRS.
The Delaware Division of Revenue administers the income tax code and process in the state. If you have questions, you can call the personal tax assistance team at 1-302-577-8200.
Filing and payment deadline
Many states use the federal tax deadline of April 15 as the due date for state tax returns. But Delaware gives filers extra time. You’ll have until April 30 to file your Delaware tax return.
If you need more time to file your return, you can apply for an extension. This gives you until Oct. 15 to file your return, but you’ll still need to pay what you owe by the original deadline.
If you don’t file on time and you owe taxes, the state will assess a late-filing penalty and you’ll pay interest. In 2017, the state assessed a late filing penalty of 5% of the amount due per month, plus, interest accrued at 0.5% per month or part of a month from April 30 until the debt is paid in full.
Delaware has many of the same filing statuses that you’ll find on your federal return, including:
- Head of household
- Married filing jointly
- Married filing separately
The state also allows married couples filing separately to file their returns on the same form for the sake of convenience. This is called a combined separate return.Learn how your tax filing status affects your tax bill
Delaware income tax rate(s)
The state has a progressive tax code, which means that your tax rate depends on your taxable income. That said, the tax brackets are the same whether you’re single or filing jointly with your spouse. Here are the tax rates and bracket thresholds for the 2018 tax year:
|2.2%||$2,001 – $5,000|
|3.9%||$5,001 – $10,000|
|4.8%||$10,001 – $20,000|
|5.2%||$20,001 – $25,000|
|5.55%||$25,001 – $60,000|
|6.6%||$60,001 or more|
Deductions and adjustments to income
Delaware offers taxpayers several deductions and credits to help them lower their tax bill, or even to help them get a bigger tax refund. Here are some of the more noteworthy tax breaks that may be available to you.
You have the choice to itemize your deductions or to claim the standard deduction available to all taxpayers. The amount you can claim depends on your filing status. The standard deductions for 2018 are:
- Single: $3,250
- Head of household: $3,250
- Married filing jointly: $6,500
- Married filing separately: $3,250
- Married filing a combined separate return: $3,250
If you’re 65 or older or blind, you may qualify for an additional standard deduction of $2,500 (or $5,000 if you’re 65 or older and blind).
Delaware allows you to itemize deductions on your state return even if you claimed the standard deduction on your federal income tax return.
Here are some of the itemized deductions that were available for 2017 and which could be available again for 2018:
- Foreign taxes paid: If you claim the federal foreign tax credit, you can deduct the actual amount you paid in foreign taxes.
- Charitable mileage: If you used your vehicle during the tax year as part of your volunteer service for a charitable organization, you can claim a deduction of $0.26 per mile.
- Federal itemized deductions: You can also include any itemized deductions you claimed on your federal tax return.
State tax credits
Some credits that were available in 2017, and which may be available in 2018, include:
- Child care credit: If you qualify for the federal child and dependent care credit, and reside in Delaware, you may be able to take a credit on your Delaware state tax return. The amount of the credit is 50% of your federal credit.
- Earned income tax credit: If you qualify for the federal earned income tax credit, you can claim this credit on your state return. The amount of the credit is 20% of your federal credit.
- Volunteer firefighter credit: Active volunteer firefighters or members of volunteer fire company auxiliaries or volunteer rescue squads can take a credit of $400.
How to file your Delaware state tax return
The Delaware Division of Revenue allows you to e-file your return through its website. It’s free, and there’s no income requirement, but you’ll need to create an online account. If you’re only filing one state return, you can also opt to file both your federal and your Delaware returns through Credit Karma Tax®, which never charges a fee to help you file your tax returns.
If you’d rather file a paper return, you can download forms from the state’s website and fill them out on your computer or by hand. If you owe money, mail your return and the enclosed payment to:
Delaware Division of Revenue
P.O. Box 508
Wilmington, DE 19899-0508
If, however, you’re getting a refund, mail your return to:
Delaware Division of Revenue
P.O. Box 8710
Wilmington, DE 19899-8710
If you owe and can’t pay
If you can’t pay what you owe, contact the Delaware Division of Revenue’s Installment Section as soon as possible at 1-302-577-8586. Based on your situation, it will choose the best way for you to pay your bill, including setting you up with an installment plan.
That said, you may owe penalties and interest on the unpaid amount until your payment plan is finished. In 2017, interest was charged at 0.5% per month or part of a month, and the failure-to-pay penalty is 1% per month up to 25% total.
If you don’t pay, your name and address could end up on a list of delinquent taxpayers published on the state’s website.What should you do if you can't pay your federal tax bill on time?
Tracking your Delaware tax refund
If you’re expecting a refund on your state tax return, you can check the status on the state’s website. You’ll need to provide your Social Security number and the refund amount to get an update.
High-income earners don’t have to worry about progressively increasing tax rates, and everyone gets a couple of extra weeks to file their state return after their federal return is due.
As you prepare for your Delaware state tax return, make sure to keep the state’s deductions and credits in mind and avoid penalties and interest by filing and paying on time.
Rachel Weatherly is a tax product specialist with Credit Karma Tax®. She studied accounting and finance at Western Carolina University and has also worked as a tax analyst. You can find her on LinkedIn.