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Delaware State Taxes: What You’ll Owe in the 2026 Tax Season
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Delaware has a graduated income tax rate with seven brackets that top out at 6.6 percent. In addition, the state has a marriage penalty, meaning it doesn’t adjust brackets for those married and filing jointly. However, the state has no sales tax. Overall, the state ranks in the middle on the Tax Foundation’s 2026 State Tax Competitiveness Index.
The big picture:
- Income tax: Rates range from 0 percent on income less than $2,000 to 6.6 percent on income at or above $60,000.
- Property tax: The state had an average property tax rate of 0.54 percent of a home’s assessed value in 2024, the most current data available from the Tax Foundation. Actual rates vary by county.
- Sales tax: Delaware has no sales tax.
How is income taxed?
Rates range from 0 percent on income less than $2,000 to 6.6 percent on income at or above $60,000. The rates and brackets are below:
What about investment income?
Capital gains are taxed like other income, based on the same income tax brackets.
Are Social Security benefits taxed?
No, the state does not tax Social Security benefits.
How is property taxed?
The state had an average property tax rate of 0.54 percent of a home’s assessed value in 2024, the most current data available from the Tax Foundation. Actual rates vary by county, with the lowest being 0.31 percent in Sussex County and the highest 0.72 percent in New Castle County. The lowest median tax paid was $1,222 in Sussex County, while the highest was $2,499 in New Castle County.
What about sales and other taxes?
- Sales tax: Delaware doesn’t have a sales tax.
- Gas and diesel: The state taxes gasoline at 23 cents per gallon and diesel at 22 cents per gallon.
- Vehicle tax: The fee for titling a vehicle is 5.25 percent. The state also has annual registration fees. Details can be found here.
- Alcohol: The state doesn’t impose sales tax, including on alcohol. The state does impose excise taxes on wholesalers who distribute alcohol, and those costs can be passed onto consumers.
- Lottery: The state withholds 24 percent of winnings over $5,000 for federal taxes. The winnings may also be subject to state or local taxes.
Will my heirs or estate have to pay inheritance and estate tax?
No, the state does not have an inheritance or estate tax.
Are there any tax breaks for older residents?=
- Senior school property relief: Homeowners who are 65 or older may be eligible for a tax credit to reduce regular school property taxes by up to 50 percent (up to $500). This credit can only apply to property taxes on a taxpayer’s primary residence. People who moved to Delaware after 2018 must have lived in the state for a period of at least 10 years to receive the benefit. Taxpayers must pay their property tax bill by the end of each year to be eligible. The application deadline is April 30.
- Retirement income exclusion: Pensions and other retirement income is taxable in Delaware like other income, but residents who are 60 or older may receive a pension exclusion of up to $12,500, or the amount of the pension (whichever is less).
Are military retirement pensions taxed?
Military retirement pay is taxable in Delaware, but retirees who are 60 or older are eligible for a reduction of $12,500. However, you can only get one pension exemption, military or otherwise.
What is the deadline for filing taxes in 2026?
The annual state tax filing deadline was April 30, 2026, although taxpayers were allowed to file for an extension with a deadline of Oct. 15. However, the extension request must have been filed by April 30, and all taxes due must have been paid by that date, too. Taxpayers must file for a state extension separately from a federal extension.
More AARP Financial Resources
- AARP Retirement Calculator Determine if you are saving enough to retire when — and how — you want.
- AARP Social Security Calculator Figure out when to claim and how to maximize your Social Security benefits.
- AARP Tax Tools Explore resources to help you calculate and prepare taxes.
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