Delaware Tax Return Guide: Essential Updates and Filing Tips

• admin
• February 21, 2025
• 6 min read

Delaware Tax Return Guide: Essential Updates and Filing Tips

Filing your Delaware tax return can initially seem daunting, especially with the constant evolution of tax laws and procedures. Whether you’re a long-time resident or new to the First State, understanding the latest updates, perhaps through a planning session, is crucial for a seamless filing experience. This guide provides a comprehensive overview of Delaware’s tax system, recent changes for 2025, and practical advice to help business owners and individuals navigate the process with confidence and ease.

Key Takeaways

• Tax Season Start Date: Delaware’s Division of Revenue began processing 2024 individual income tax returns on January 29, 2025.
• Refund Processing Time: Due to enhanced fraud prevention measures, refunds will start being issued on February 15, 2025, with processing times of 10-12 weeks.
• Filing Deadline: The deadline for Delaware Personal Income Tax returns is Wednesday, April 30, 2025.

Understanding Delaware’s Tax System

Delaware imposes a progressive state income tax, with rates ranging from 2.2% to 6.6%, depending on your taxable income. Unlike some states, Delaware does not have a sales tax, which can be a financial relief for residents. However, it’s essential to be aware of other taxes, such as property taxes and specific local taxes, that may apply.

Recent Tax Updates for 2025

Staying informed about the latest tax updates ensures compliance and helps you take advantage of any new benefits or credits.

• Organ and Bone Marrow Transplantation Tax Credit: Delaware introduced a refundable tax credit to incentivize residents to donate organs or bone marrow. This credit covers all unreimbursed medical and related expenses up to $10,000. To claim this credit, submit bank records or receipts for each covered expense, along with written acknowledgment of the donation from the relevant medical organization, including details of the procedures and dates.
• New Checkboxes on Tax Forms: The personal income tax forms now include checkboxes for:
  • 529 Contributions: Designate deductions for contributions to Delaware-sponsored tuition programs.
  • ABLE Program Contributions: Indicate deductions for contributions to the Achieving a Better Life Experience (ABLE) program.
  • Military Pension: A checkbox for taxpayers under 60 who qualify for the full pension deduction of $12,500.
  • Dependent Status: A checkbox for taxpayers who can be claimed on another individual’s return.

Filing Your Delaware Tax Return

Proper preparation, ensuring you are securely logged out of any shared devices, and understanding the filing process before any deadlines expire can help you avoid errors, delays, and potential penalties. Here’s a step-by-step breakdown of how to file your Delaware tax return for 2025:

Determine Your Filing Status

Your filing status affects your tax rates and available deductions. Delaware recognizes the following statuses:

• Single
• Married Filing Jointly
• Married Filing Separately
• Head of Household
• Qualifying Surviving Spouse

If you’re married, Delaware allows you to file separately even if you filed jointly for federal taxes.

Gather Required Documents

Before you start your return, collect:

• W-2 Forms from employers
• 1099 Forms (for freelance work, interest, dividends, etc.)
• Last Year’s Tax Return for reference
• Receipts for Deductible Expenses (medical costs, charitable donations, etc.)
• Proof of State Tax Payments if you made estimated payments

Choose a Filing Method

Delaware allows multiple filing options, including electronic filing:

• E-File via the Delaware Division of Revenue: Faster processing and quicker refunds.
• Paper Filing: Download forms from the Delaware Division of Revenue website and mail them.
• Third-Party Tax Software: Many software providers support Delaware state tax returns.

Check for Tax Credits and Deductions

Maximize your tax savings by claiming eligible credits and deductions:

• Standard Deduction: $3,250 for single filers, $6,500 for married joint filers.
• Itemized Deductions: Includes mortgage interest, medical expenses, and charitable donations.
• Earned Income Tax Credit (EITC): Delaware offers a non-refundable credit based on the federal EITC.
• 529 Plan Contributions: Contributions to Delaware’s college savings plan are deductible.
• Retirement Income Exclusions: Taxpayers over 60 can exclude up to $12,500 of pension or other retirement income.

Pay Any Taxes Owed

If you owe taxes, you can pay online through the Delaware Taxpayer Portal, by check, or through electronic funds withdrawal. Delaware also offers payment plans if you can’t pay in full by the deadline.

Submit Your Return by April 30, 2025

Unlike the federal deadline of April 15, Delaware’s tax return deadline is April 30, 2025. If you need extra time, you can file for an automatic extension until October 15, 2025, but you must still pay any estimated taxes owed by April 30 to avoid penalties.

Frequently Asked Questions (FAQs)

Does Delaware have a state sales tax?

No, Delaware does not impose a sales tax, making it a tax-friendly state for shoppers. However, the state does levy excise taxes on certain goods like alcohol and tobacco.

How long does it take to receive my Delaware state tax refund?

Refunds typically take 10-12 weeks for paper returns and 4-6 weeks for e-filed returns. The delay is due to enhanced fraud prevention measures.

Do I need to file a Delaware tax return if I work in another state?

If you are a Delaware resident but work in another state, you must still file a Delaware return. However, Delaware provides a tax credit for taxes paid to other states to prevent double taxation.

Navigating Your Tax Journey with Confidence

Understanding Delaware’s tax system and the latest updates can help you file with confidence and avoid costly mistakes. Whether you’re claiming new credits, checking refund status, or making payments, staying informed ensures you maximize your return. If you need further assistance, consider consulting a tax professional or using the Delaware Division of Revenue’s online resources.

By following this Delaware tax guide, you’ll be well-prepared for tax season and can take advantage of every available benefit. Happy filing!