Delaware

Tax Rate Range: Low - 2.2%; High - 5.95%
Income Brackets: Lowest - $5,000; Highest - $60,000
Number of Brackets: 6
Tax Credits: Single - $110; Married - $220; Dependents - $110; Over 60 - take an additional $110
Standard Deduction: $3,250 if single and not itemizing; $6,500 if married filing jointly and not itemizing.
Medical/Dental Deduction: None
Federal Income Tax Deduction: None
Retirement Income Taxes: Social Security and Railroad Retirement benefits are exempt. Taxpayers 60 and older can exclude $12,500 of investment and qualified pension income. Out-of-state government pensions qualify for the pension and retirement exemption. Under age 60, $2,000 is exempt.
Retired Military Pay: Up to $2,000 of military retirement pay excluded for individuals under age 60; $12,500 if 60 or older.

State Tax Software

Military Disability Retired Pay: Disability Portion - Length of Service Pay; Member on September 24, 1975 - No tax; Not Member on September 24, 1975 - Taxed, unless combat incurred. Retired Pay - Based solely on disability: Member on September 24, 1975 - No tax; Not Member on September 24, 1975 - Taxed, unless all pay based on disability and disability resulted from armed conflict, extra-hazardous service, simulated war, or an instrumentality of war.
VA Disability Dependency and Indemnity Compensation: Not subject to federal or state taxes
Military SBP/SSBP/RCSBP/RSFPP: Generally subject to state taxes for those states with income tax. Check with state department of revenue office.

Sales Taxes

All real property in the state is subject to tax unless specifically exempt. Personal property, tangible and intangible property is exempt. Real estate is subject to county, school district, vocational school district and municipal property taxes. The state offers various property tax relief programs for residents age 65 and older and for residents with disabilities. Homeowners 65 and older can get a credit equal to half of the school property taxes, up to $500.

Inheritance and Estate Taxes

In July 2005 the legislature eliminated the requirement to file a Delaware estate tax return for dates on which the federal estate tax law does not allow a credit for state death tax (currently 2005 through 2010). It also eliminated the special lien on the gross estate tax if the decedent dies on a date on which the federal estate tax does not allow credit for state death taxes paid.

For further information, visit the Delaware Division of Revenue site or call 302-577-8200.

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