Delaware has progressive income tax rates from 2.2% to 6.6%, while New Jersey charges progressive rates from 1.4% to 10.75%. Living in Delaware saves $4,788/year on $100k income vs New Jersey. Delaware's biggest advantage: NO SALES TAX (vs NJ's 6.625%). However, New Jersey has much higher property taxes (2.47% vs DE's 0.61%). Overall, Delaware is the clear tax winner for most income levels. The DE-NJ border represents one of America's sharpest tax divides.

By Daniel, Founder of CountryTaxCalc

Daniel has spent 5+ years researching tax systems across 95+ countries and all US states to make tax comparison accessible to everyone. For corrections, contact us.

Last Updated: April 2026

The Big Picture

🦅 Delaware

2.2-6.6%

Progressive

7 brackets, up to 6.6%

🏖️ New Jersey

1.4-10.75%

Progressive

8 brackets, up to 10.75%

Typical Annual Savings

At $100,000 income:

$4,788

That is $399/month back in your pocket!

Tax Savings by Income Level

IncomeDE TaxNJ TaxSavings10-Year
$50,000 $2,212$1,775-$437-$4,370
$100,000 $5,212$10,000$4,788$47,880
$200,000 $11,812$16,875$5,063$50,630
$500,000 $31,612$49,688$18,076$180,760
💡

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Moving from New Jersey to Delaware? Multi-state returns are tricky—NJ 2% exit tax, partial-year residency. Get matched with a CPA who specializes in NJ departures.

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Delaware Pros and Cons

✅ Pros

  • NO SALES TAX: $0 vs NJ 6.625% saves $663/year on $10k spending
  • Lower income tax: 6.6% top rate saves $4,788 on $100k vs NJ 10.75%
  • Much lower property tax: 0.61% (vs NJ 2.47%) saves $4,650-$18,600/year
  • Corporate haven: LLC formation capital, no corporate tax on out-of-state income
  • Beach access: Rehoboth, Bethany Beach (less crowded than Jersey Shore)

❌ Cons

  • Limited job market: Wilmington only 720K metro (vs NJ/NYC/Philly access)
  • Smaller state: Fewer amenities, entertainment options
  • Commuter challenges: Long drives to major cities
  • Higher income tax at low incomes: At $50k, DE 4.4% vs NJ 3.5%
  • Limited transit: Car-dependent, no rail to NYC/Philly

New Jersey Pros and Cons

✅ Pros

  • NYC/Philly access: 30-60 min to two major metros for jobs/culture
  • Huge job market: Finance, pharma, logistics
  • Better schools: NJ ranks #2 vs DE #18 in K-12 education
  • Public transit: NJ Transit to NYC, PATCO to Philly
  • Diversity: More multicultural, international food/culture

❌ Cons

  • Highest property tax: 2.47% (highest in US) costs $4,650-$18,600 more/year
  • High income tax: 10.75% top rate costs $4,788 more on $100k
  • Sales tax: 6.625% (vs DE 0%) costs $663/year
  • High cost of living: Housing, food, services all expensive
  • 2% exit tax: Moving out of NJ can trigger exit tax on certain assets

Frequently Asked Questions

Q: How much will I save moving from New Jersey to Delaware?

On $100,000 income, Delaware saves $4,788/year in income tax (DE 5.2% vs NJ 10.0%). DE has NO SALES TAX (saves $663/year vs NJ 6.625%). Property tax savings are massive: DE 0.61% vs NJ 2.47%. On a $500k home, DE pays $3,050/year vs NJ $12,350/year—difference of $9,300/year. Total savings: $14,751/year. Over 10 years: $147,510.

Q: Why does anyone live in New Jersey if Delaware is so much cheaper?

Jobs and access. New Jersey offers 30-60 min commutes to NYC and Philadelphia—two of America's largest job markets. NJ also has better schools (#2 vs DE #18), public transit, and international airports (Newark EWR). Many high earners accept NJ's high taxes for career opportunities and NYC metro access. Delaware appeals to retirees, remote workers, and those who value tax savings over convenience.

Q: Is Wilmington DE a viable alternative to living in NJ for NYC workers?

Difficult but possible. Wilmington to NYC is 2-2.5 hours by Amtrak (vs 30-60 min from North Jersey). Most NYC workers wouldn't commute daily from DE. However, with 2-3 days/week remote work, it becomes viable. Tax savings: $14,751/year at $100k. Many remote/hybrid workers are making this move post-2020.

Q: What is Delaware's 2% exit tax situation?

Delaware doesn't have an exit tax. NEW JERSEY has a 2% exit tax on home sales—charged at closing when you sell your NJ home to move out of state. This is one-time, not recurring. If you sell a $600k NJ home to move to DE, you pay $12k exit tax at closing. However, you still save $14,751/year in ongoing taxes in DE, so exit tax is recouped in <1 year.

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