Taxes in Delaware
Updated:
By: Lauren Hamer
Sr. Editor
Edited By: Jeff Smith
Sr. Content Manager
Retirement Living takes an unbiased approach to our reviews. We may earn money when you click a partner link. Learn More
Everyday purchases in Delaware are tax free, which helps residents save more money. Below, we explain various Delaware state taxes affecting retirement income, such as sales tax, inheritance tax, and property taxes.
For information regarding taxes in other states, see Retirement Taxes by State.
Financial Advisors
SmartAsset Financial Advisors
- Advisors Near You
- No-Fee Options
Delaware Tax Rates
| State Sales Tax | 0% |
| Avg State/Local Sales Tax | 0% |
| Gas Tax | $0.23 per gallon |
| Diesel Tax | $0.22 per gallon |
| Cigarette Tax | $2.10 per pack |
| Income Tax | 6.60% |
| Effective Tax Rate: | 6.31% |
| Property Tax | 0.57% |
| Social Security Tax | None |
| Medical/Dental Deduction: | None |
| Federal Income Tax Deduction: | None |
| Retirement Tax | Partial |
Delaware State Taxes Explained
Delaware Sales Tax
Delaware does not impose a state or local sales tax.
Delaware Income Taxes
State income tax brackets range from 2.2% (taxable income from $2,001 to $5,000) to 6.6% (taxable income above $60,000). Wilmington also levies a fee on wages.
Delaware Property Taxes
The state of Delaware imposes no property tax. Local municipalities levy property tax at an effective rate of 0.57%. The median home value in Delaware is $251,100, which equates to $1,431 in annual property taxes.
Delaware residents age 65 and older may use the School Property Tax Credit to offset 50% of those local taxes. The credit must be used to reduce property taxes by up to $400 on the primary residence. Those who moved to Delaware after January 1, 2018, are not eligible for the credit until they live in the state for 10 consecutive years.
Delaware Retirement Taxes
Social Security is tax exempt in Delaware. Taxpayers who are at least 60 years of age can exclude $12,500 of retirement income. This income can come from 401(k) plans, pensions and other retirement accounts as dividends, capital gains or interest. Retirees who are landlords must also count net rental income from real property. Retired taxpayers under the age of 60 are entitled to a $2,000 exclusion.
Retired military pay follows the same rules that apply to other types of retirement income. $12,500 of military retirement benefits are excluded from income tax if the taxpayer is 60 or older. Younger retirees can exclude $2,000
Delaware Estate and Inheritance Taxes
Delaware does not impose an estate or inheritance tax.
For information on Delaware taxes, visit the Delaware Division of Revenue.