Delaware does not tax capital gains at a special rate. A gain from stocks, a business or real estate flows into your federal adjusted gross income, and Delaware taxes it with the rest of your income under one graduated schedule. Because the top bracket starts at only $60,000 of taxable income, a large gain is usually taxed at the top rate of 6.6%.
This guide uses Title 30, Chapter 11 of the Delaware Code (the personal income tax law), the Division of Revenue's personal income tax FAQ and its 2025 PIT-RES and PIT-NON instruction booklets, and two IRS pages, all read on 3 November 2026. We found no Delaware rule that treats long-term gains differently from short-term gains; if you believe one applies to you, check with the Division of Revenue.
Section 1102 of Title 30 sets the schedule for taxable years beginning after December 31, 2013, and the Code text we read contains no later replacement. Taxable income is taxed in slices:
| Taxable income slice | Rate |
|---|---|
| Over $2,000 to $5,000 | 2.2% |
| Over $5,000 to $10,000 | 3.9% |
| Over $10,000 to $20,000 | 4.8% |
| Over $20,000 to $25,000 | 5.2% |
| Over $25,000 to $60,000 | 5.55% |
| Over $60,000 | 6.6% |
The Division of Revenue's FAQ describes the same schedule as ranging from 2.2% to 5.55% for income under $60,000 and 6.60% for income of $60,000 or over. The statute lists no rate for the first $2,000, and for taxable income of $60,000 or less the Director of Revenue prescribes tax tables built on these rates (Section 1102(d)). We did not find a published change to this schedule for 2026 or 2027 in the sources we read. Check the Division of Revenue before planning a large sale.
Section 1105 says a resident's taxable income is the federal adjusted gross income as defined in the laws of the United States, with the modifications, deductions and personal exemptions the subchapter provides. A capital gain reported on your federal return is therefore already in the starting figure. Section 1106 lists the Delaware additions and subtractions; the lists we read contain no subtraction aimed at capital gains as such.
The one provision that reaches gains is the pension and eligible retirement income exclusion. For taxable years beginning in 2022 through 2026, a person age 60 or older may subtract up to $12,500 received as pensions or as eligible retirement income (the Code keeps the $12,500 limit for age 60 or older for 2027 and later years too, alongside a separate military pension limit), and the Code defines eligible retirement income to include dividends, capital gains, interest and rental income from real property less deductible rental expenses. The Division's 2025 instructions say it includes capital gains net of capital losses, and that each taxpayer may receive only one pension exclusion however many pensions or distributions they receive, so the $12,500 is shared with any pension. The statute also adds a domicile test: a person 60 or older who was domiciled in Delaware before 1 January 2027 must have been domiciled for at least 3 years, and one domiciled on or after that date for at least 5 years.
These figures are our arithmetic on the Section 1102 schedule, not an official calculation. They ignore credits, the standard deduction, exemptions and the pension exclusion. The table shows the extra Delaware tax when a gain sits on top of $60,000 of other taxable income, so every dollar of gain is taxed at 6.6%.
| Gain added to taxable income | Added Delaware tax |
|---|---|
| $10,000 | $660 |
| $50,000 | $3,300 |
| $100,000 | $6,600 |
| $500,000 | $33,000 |
Worked example (ours): a filer has $45,000 of other taxable income and a $50,000 gain, so taxable income is $95,000. Tax on the schedule is $5,253.50. Without the gain the tax on $45,000 would be $2,111.00. The gain adds $3,142.50, because $15,000 of it fills the 5.55% bracket and the remaining $35,000 is taxed at 6.6%. Real returns differ, since for taxable income up to $60,000 the Division's tax tables are used and credits and deductions apply.
Because Delaware starts from federal adjusted gross income, a capital loss enters the Delaware return as it enters the federal one. IRS Topic 409 says that if your capital losses exceed your gains, the excess you can claim to lower your income is the lesser of $3,000 ($1,500 if married filing separately) or your total net loss, and that you can carry the rest forward to later years. We read no separate Delaware loss limit for residents; that follows from the federal starting point and is our reading, not a sentence in the Delaware pages. For nonresidents, Section 1124(d) says deductions for capital losses, net capital gains and net operating losses are based solely on items from Delaware sources, but otherwise determined in the same manner as the corresponding federal deductions.
A nonresident pays the tax computed as if a resident, multiplied by the ratio of modified Delaware source income to Delaware adjusted gross income (Section 1121). Whether a gain counts as Delaware source income depends on the asset:
Delaware has no separate home-sale exclusion that we found; the federal one flows through adjusted gross income. IRS Topic 701 says you may qualify to exclude up to $250,000 of the gain on the sale of your main home, or up to $500,000 if you file a joint return. For the federal test see our home sale capital gains guide.
A different rule applies to nonresident sellers of Delaware real estate. Section 1126 requires a nonresident individual to file one of three items with the Recorder: a declaration of estimated income tax applying the highest marginal rate to an estimate of the gain, an alternative Division form that applies that rate to the amount realized less recorded liens, or a declaration under penalty of perjury that the sale is exempt, that all or part of the gain may be excluded, or that it is a foreclosure or deed in lieu. The payment is remitted with the deed and withheld from the net proceeds. The statute says this section does not itself impose a tax or change the seller's liability. The estimated payments are claimed as a credit on Line 39 of the resident return, with copies of Form REW-EST attached, per the Division's instructions.
The Division's 2025 resident instructions say individual returns for the 2025 calendar year were due on or before April 30, 2026. Residents file Form PIT-RES and nonresidents Form PIT-NON. For 2026 returns, check the Division's current-year forms page for the date.