Delaware has a progressive income tax system with rates ranging from 2.2% to 6.6% across 7 brackets (the first $2,000 is taxed at 0%). The First State's distinctive combination: moderate 6.6% top rate + NO SALES TAX (one of only 5 states, along with Alaska, Montana, New Hampshire, Oregon) + corporate tax haven status (about two-thirds of Fortune 500 companies incorporated here, with about $1.8B in business entity taxes in FY2024).
Why these rates? Delaware balances individual income tax (6.6% top rate) with massive corporate franchise tax and business entity revenue (about $1.8B in FY2024 from more than 2.1 million registered entities). This dual revenue stream funds public services without especially high individual tax rates. Delaware's lack of a general sales tax shifts burden from consumption to income taxes, business gross receipts taxes, and corporate fees.
How it compares:
Recent changes: Delaware's tax brackets are unchanged for 2026. The state continues to attract corporations (more than 2.1 million entities registered, about double its 1M population) through favorable business laws (Court of Chancery specialized business court, flexible LLC statutes). Personal income tax rates unchanged 2025-2026.
Note: These are marginal rates — you only pay the higher rate on income within each bracket.
Source: Delaware Division of Revenue
Here's what Delaware residents actually pay at different income levels (2026, single filer, standard deduction):
| Annual Income | Federal Tax | State Tax | Total Tax | Take-Home Pay | Effective Rate |
|---|---|---|---|---|---|
| $50,000 | $3,820 | $2,098 | $5,918 | $44,082 | 11.8% |
| $75,000 | $7,670 | $3,609 | $11,279 | $63,721 | 15.0% |
| $100,000 | $13,170 | $5,259 | $18,429 | $81,571 | 18.4% |
| $150,000 | $24,734 | $8,559 | $33,293 | $116,707 | 22.2% |
| $250,000 | $51,304 | $15,159 | $66,463 | $183,537 | 26.6% |
Note: Includes federal and state income tax only. Does not include FICA (Social Security/Medicare), which adds 7.65% for employees.
Key takeaway: At $100K, Delaware takes $5,259 in state tax alone.
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Migration Trends: People moving to Delaware from neighboring states commonly cite the reasons below. Official state-to-state migration flows are published by the U.S. Census Bureau (link at the end of this section); we do not restate specific counts here.
Why people move to Delaware:
Why people leave Delaware:
Tax considerations if moving here:
| State | Tax Rate | Tax on $100K Income | Difference from Delaware |
|---|---|---|---|
| Delaware | 0-6.6% | $5,259 | Baseline |
| Maryland | 2-6.5% + county | $4,384 + county | −$875 (before county tax) |
| Pennsylvania | 3.07% flat | $3,070 | −$2,189 (save) |
| New Jersey | 1.4-10.75% | $4,180 | −$1,079 (save) |
| Virginia | 2-5.75% | $4,936 | −$323 (save) |
Key insight: At $100K income, DE ($5,259 state tax) is competitive with neighbors. Maryland ($4,384 state tax only, before county income tax of 2.25%-3.3%), Pennsylvania ($3,070), New Jersey ($4,180), and Virginia ($4,936) are all lower on state income tax alone. However, Delaware's NO SALES TAX dramatically improves total burden.
Total tax burden at $100K income + $40K annual spending:
Result: Delaware's ~7.2% total burden is still LOWEST among Mid-Atlantic neighbors, though the margin has narrowed slightly now that Delaware's real income tax (including the previously-unmodeled $110 personal credit) is properly reflected. NO SALES TAX saves $2,400/year + ultra-low 0.56% property tax saves meaningfully vs neighbors. Delaware WINS for homeowners and high-spending households — Pennsylvania, Virginia and Maryland (before county income tax) are within about $160 of each other.
Delaware's income tax ranges from 0% to 6.6% across 7 progressive brackets. The 6.6% top rate applies to income over $60,000 - a relatively low threshold meaning most middle-class workers ($75K+ income) pay the maximum marginal rate. At $100K income, you pay approximately $5,259 state tax (5.3% effective rate). However, Delaware is one of only 5 states with NO SALES TAX, offsetting the income tax with $2,400/year savings on $40K annual spending.
Delaware has no general sales tax and instead relies on income tax (6.6% top rate) + massive corporate franchise tax and business entity revenue (about $1.8B in FY2024 from more than 2.1 million entities, including about two-thirds of the Fortune 500). For high-spending households, this is a major win. At $100K income + $40K spending: DE pays $5,259 income + $0 sales = $5,259 total (5.3%). Pennsylvania (6% sales + 3.07% income): $3,070 income + $2,400 sales = $5,470 total (5.5% - DE still edges out PA on income+sales combined, by $211, and wins on property tax too). Maryland (6% sales + state income, before county tax): $4,384 income + $2,400 sales = $6,784 total (6.8% - DE saves $1,525/year even before Maryland's county income tax of 2.25%-3.3%). Result: NO SALES TAX plus competitive income tax makes Delaware a strong total-tax value.
Delaware is the premier corporate tax haven due to: Court of Chancery (specialized business court resolving disputes fast, no juries, expert judges, predictable rulings), flexible corporate laws (LLC statutes favoring management over shareholders), no Delaware corporate income tax on income earned outside the state (corporations registered in DE but operating elsewhere pay franchise tax and fees rather than Delaware income tax on that income), privacy (owners/directors don't need to be listed publicly). More than 2.1 million entities (about two-thirds of the Fortune 500) pay about $1.8B in franchise tax and business entity fees annually (largely flat fees, not income-based). Personal income tax (6.6% on residents) is separate - high-income execs often claim residency elsewhere (FL 0%, TX 0%) while working for DE-incorporated companies. Delaware gets corporate fees, doesn't tax individual executives.
Delaware is EXCELLENT for retirees. Social Security is not taxed in Delaware (at any age, regardless of income). Pension income is excluded up to $12,500/year if age 60+ (the excess is taxed at regular progressive rates). Example: At $80K retirement ($25K SS + $55K pension), age 65: DE taxes $0 of the SS and taxes the $42,500 of pension above the $12,500 exclusion at its progressive rates, less deductions and credits, so the tax is a small fraction of the $80K total. Compare FL $0 (no income tax) vs PA $0 (Pennsylvania fully exempts private pension income — a correction from this page's prior claim that PA taxes it). DE loses to both FL and PA on this specific scenario, but still beats most other Mid-Atlantic states on total tax burden once property tax and no-sales-tax are factored in. NO SALES TAX saves retirees $1,500+ annually.
Yes, IF you prioritize homeownership savings over urban amenities. NJ property tax 1.89% (#1 highest nationally) vs DE 0.56% (#11-lowest). On $400K home: NJ pays $7,560/year vs DE $2,240/year = DE saves $5,320 annually. Over 30-year mortgage: save $159,600 property tax by moving to DE. Income tax: at $100K income, NJ's top 10.75% rate only applies to income far above $100K — in practice NJ ($4,180) actually costs about $1,079/year LESS than Delaware ($5,259) at this income level, a genuine reversal of what this page previously claimed. Sales tax: NJ 6.625% vs DE 0% = DE saves $2,650/year on $40K spending. Total annual savings: about $6,891/year at $100K + $40K spending + $400K home (property tax savings and no-sales-tax more than offset the income tax disadvantage). BUT: Wilmington (70K) feels small vs NJ suburbs (access NYC/Philly), DE job market limited (1M population), commute to NYC/Philly difficult (Wilmington 2hrs NYC, 30min Philly). WINS for: retirees (huge savings, no commute), remote workers (keep NYC salary, slash costs), families prioritizing home equity. LOSES for: urban lifestyle lovers (limited restaurants/culture), career climbers (fewer jobs in DE).
Delaware ratified the US Constitution FIRST (December 7, 1787) = 'The First State'. This early statehood allowed DE to develop business-friendly laws in 1899 (General Corporation Law), becoming corporate haven before other states. Today: more than 2.1 million entities registered (about double DE's 1M residents), about two-thirds of the Fortune 500 incorporated, and about $1.8B in business entity taxes (FY2024), a large share of state revenue. This corporate dominance shapes tax policy: DE keeps personal income tax moderate (6.6%) because corporate fees fund state budget, helping Delaware forgo a general sales tax. Result: individuals benefit from corporate tax haven status through NO SALES TAX + low property tax (0.56%), accepting 6.6% income tax as tradeoff.
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How we calculate: Our Delaware tax calculator uses official 2026 tax brackets from the Delaware Division of Revenue. We apply marginal tax rates correctly (only the income within each bracket is taxed at that rate), subtract the standard deduction ($3,250 single for 2026), apply the $110 Delaware Personal Credit against the resulting tax, and calculate effective tax rates. Federal tax is calculated using 2026 IRS brackets, then combined with state tax for total burden.
Data sources:
Verification: All tax rates and brackets verified against Delaware Code Title 30 (Revenue and Taxation) and Delaware Division of Revenue publications on March 17, 2026. Delaware has no general sales tax. Figures shown are for standard situations only (single filer, W-2 income, standard deduction).
Limitations: Assumes single filer, standard deduction ($3,250), W-2 income only. Does not include: itemized deductions, credits (EITC, child tax credit), part-year residency, Social Security exclusion, pension exclusion ($12,500 limit, age 60+), gross receipts tax (0.0945-0.7468% on businesses, applies to business owners). Property tax data is Wilmington median ($340K home × 0.56% = $1,904/year); actual rates vary by county (range: 0.4% to 0.9%). NO SALES TAX statewide (no local variations).
For complex situations: Consult a licensed Delaware CPA or use official tax software, especially for: multi-state income allocation, retirement income optimization ($12,500 pension exclusion for age 60+; Social Security is not taxed), business ownership (gross receipts tax implications), real estate transactions.
Last Updated: October 2026
Verified By: Daniel · CountryTaxCalc
Contact: For corrections or questions, visit our contact page.
Last Updated: October 2026