Delaware State Tax Rate (2026 & 2027 Guide)

Delaware uses a graduated state income tax system with multiple brackets.

For the 2026 & 2027 tax years, rates range from 0% to 6.6%.

The key thing to understand is that only the income within each bracket is taxed at that rate, not your entire income.

Delaware State Income Tax Brackets

(All filing statuses use the same brackets)

• $0 to $2,000 → 0%
• $2,000 to $5,000 → 2.2%
• $5,000 to $10,000 → 3.9%
• $10,000 to $20,000 → 4.8%
• $20,000 to $25,000 → 5.2%
• $25,000 to $60,000 → 5.5%
• $60,000+ → 6.6%

How Delaware’s Tax System Works

Delaware’s system is progressive, meaning your income is taxed in layers as it increases. Even if you reach the top bracket, only the income above that threshold is taxed at the highest rate.

Example: If you earn $70,000, the first $2,000 is taxed at 0%, the next portions are taxed at increasing rates up to 5.5%, and only the income above $60,000 is taxed at 6.6%, which keeps your overall tax rate lower than the top rate.

Marginal vs Effective Tax Rate

Understanding this difference is important for tax planning.

• Marginal rate = the highest tax bracket your income reaches
• Effective rate = the average rate you actually pay

Example: Even if you fall into the 6.6% bracket, your effective tax rate will usually be much lower because a large portion of your income is taxed at lower rates.

What Income Is Taxed in Delaware

Delaware taxes most types of income, including:

• Wages and salaries
• Self-employment income
• Investment income
• Retirement income (with exclusions available)

There are also some notable tax benefits:

• No state or local sales tax
• Social Security income is not taxed

These can help reduce your overall tax burden.

Are Delaware Taxes High?

Compared to other states:

• The top rate of 6.6% is moderately high
• The system has more brackets than most states
• No sales tax helps offset income taxes

For many residents, Delaware’s overall tax burden is considered moderate.

Electronic Filing Recommendation 💻

• File electronically to reduce errors and processing delays
• Tax software automatically applies Delaware’s multiple tax brackets
• Double-check income ranges to avoid overpaying
• E-filing helps you receive refunds faster and ensures accuracy

Summary

Delaware’s state income tax system includes seven brackets ranging from 0% to 6.6%. Because the system is progressive, most taxpayers pay a blended rate rather than the top rate on all income.

Understanding how the brackets work—and taking advantage of Delaware’s tax benefits like no sales tax—can help reduce your total tax burden.