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Official Tax Guide

Delaware Taxes 2025: Income, Sales, and Property Tax Guide

Complete guide to Delaware state taxes. Income tax (2.2% - 6.6%), sales tax, and what you need to know before moving.

Updated January 15, 2026
5 min read

State Tax Guide 2025: Delaware

Moving to Delaware offers unique tax advantages, most notably the absence of a state sales tax. However, understanding the state's progressive income tax system and property tax structure is essential for financial planning. This guide provides an overview of Delaware's tax landscape for the upcoming year.

1. Income Tax

Delaware employs a progressive personal income tax system. This means tax rates increase as your income rises, ranging from 2.2% to 6.6%.

  • Tax Structure: Progressive (Marginal)
  • Tax Brackets (2025 estimates based on current structure):
    • 2.2%: Income up to $2,000 (Single) / $4,000 (Joint)
    • 3.9%: Income over $2,000 up to $5,000 (Single) / over $4,000 up to $10,000 (Joint)
    • 4.8%: Income over $5,000 up to $10,000 (Single) / over $10,000 up to $20,000 (Joint)
    • 5.2%: Income over $10,000 up to $25,000 (Single) / over $20,000 up to $50,000 (Joint)
    • 5.55%: Income over $25,000 up to $50,000 (Single) / over $50,000 up to $100,000 (Joint)
    • 6.6%: Income over $50,000 (Single) / over $100,000 (Joint)

Note: These brackets are estimates for single and married filing jointly filers. Brackets are adjusted annually for inflation.

2. Sales Tax

Delaware is one of the few states in the U.S. with a 0% state sales tax.

  • State Rate: 0%
  • Local Taxes: Delaware law prohibits local municipalities (cities, counties) from imposing local sales taxes. Therefore, the total sales tax rate you pay at the register remains 0% statewide.
  • Impact: This is a significant financial benefit for residents, effectively increasing purchasing power compared to neighboring states.

3. Property Tax

While Delaware has no sales tax, property taxes are a primary source of revenue for local governments.

  • Overview: Delaware property tax rates are generally lower than the national average. However, they vary significantly by county and school district.
  • Effective Rate: While specific rates depend on location, property taxes in Delaware are typically calculated as a percentage of the assessed value of the home.
  • Assessment: Property is reassigned a assessed value every few years. Homeowners should be aware that property values have risen in many areas, which can impact tax bills even if the millage rate (tax rate) remains stable.
  • Exemptions: Delaware offers property tax credits for owner-occupants, seniors, and veterans. For example, the "Senior School Property Tax Freeze" may apply to qualifying low-income seniors in certain school districts.

4. Other Taxes

Beyond income and property, Delaware has specific taxes on fuel, "sin" goods, and estates.

  • Gas Tax: Delaware has a flat tax rate per gallon on gasoline. As of 2024, this is approximately $0.27 per gallon. This rate is subject to legislative changes in 2025.
  • Sin Taxes:
    • Cigarettes: Approximately $2.60 per pack.
    • Alcohol: Delaware imposes a tax on alcohol, though rates vary by type (e.g., spirits, wine, beer). For example, the tax on spirits is roughly $5.40 per gallon.
  • Inheritance Tax: Delaware does not impose an inheritance tax on beneficiaries. However, it does levy an Estate Tax on the estate of a decedent if the total value exceeds a specific exemption threshold (historically around $12.92 million, aligning with federal exemptions, though this amount is subject to change).

5. Retiree Taxes

Delaware is generally considered a tax-friendly state for retirees.

  • Social Security: Social Security benefits are not taxed by the state of Delaware.
  • Retirement Income: Delaware provides a deduction for retirement income, including pensions and withdrawals from retirement accounts (like 401(k)s and IRAs). For single filers with a federal adjusted gross income (AGI) of less than $100,000 (or $150,000 for joint filers), the first $12,500 of retirement income is exempt from state tax.
  • Other Income: Income from private pensions, government pensions, and annuities may also qualify for deductions depending on the filer's age and income level.

6. Comparison to Neighbors

Delaware’s tax structure differs significantly from its neighbors—Pennsylvania, Maryland, and New Jersey.

  • Vs. Pennsylvania:
    • Sales Tax: PA has a 6% state sales tax. Advantage: Delaware.
    • Income Tax: PA has a flat 3.07% income tax. Advantage: PA for high earners; DE for low-to-mid earners.
    • Property Tax: Both states have similar property tax burdens, though PA school districts rely heavily on them.
  • Vs. Maryland:
    • Sales Tax: MD has a 6% state sales tax. Advantage: Delaware.
    • Income Tax: MD has a progressive system (2% to 5.75%). Advantage: Delaware (lower top marginal rate and no local income taxes).
    • Property Tax: MD counties levy additional property taxes; DE generally has lower overall rates.
  • Vs. New Jersey:
    • Sales Tax: NJ has a 6.625% sales tax. Advantage: Delaware.
    • Income Tax: NJ has a progressive system (1.4% to 10.75%). Advantage: Delaware (lower top marginal rate).
    • Property Tax: NJ historically has some of the highest property taxes in the U.S. Advantage: Delaware.

Disclaimer

Tax laws change frequently. The information provided in this guide is for general informational purposes only and is not a substitute for professional tax advice. Consult a CPA or tax professional regarding your specific financial situation.