The Debbie Reed Team
 

FAQ: Delaware Tax

 

Can I get private health insurance?

This is important to retirees who are not yet 65. There may be a gap of 5 years or more between the time they are no longer covered by the health insurance of the company they worked for and their eligibility for Medicare. Or, perhaps they have been self-employed with coverage by a company that may or may not write insurance policies in Delaware.

 

For more information, visit the Delaware Insurance Department online. http://www.delawareinsurance.gov

 

Is there personal property tax on automobiles in Delaware?

NO, but when you bring a vehicle into Delaware there is a one time document fee of 3.75% of the purchase price or NADA book value, whichever is greater. Minimum document fee is $8.00. For more details please visit the DMV online or call the Delaware Division of Motor Vehicles at 302.853.1000 for Sussex County. http://www.dmv.de.gov

 

Is School Tax extra?

In Delaware, School Tax is included and billed as part of your County Tax. That is important because homeowners age 65 and over may get a credit equal to on half of the school property taxes, up to $500. Taxpayers must pay their property tax bill in full by the end of each tax year in order to qualify for this credit for the subsequent property tax year. Learn more about how to qualify for the School Property Tax Relief for Individuals Age 65 or over – Read More http://finance.delaware.gov/publications/proptax/propmain.shtml

 

Does Delaware have an income tax?

Yes, Delaware does have an income tax that ranges from a low of 2.2% to a high of 5.95%, depending on income bracket. Standard deductions are $3250 if you are single and not itemizing or $6500 if married, filing jointly and not itemizing. For more details, see Delaware’s Tax Structure. http://revenue.delaware.gov/

 

Does Delaware tax Social Security benefits?

No, Social Security and Railroad Retirement Benefits are exempt from Delaware Income Tax.


Delaware’s Tax Structure

 

State Sales Tax: None

Gasoline Tax: $.23/gallon • Diesel: $.22/gallon

Cigarette Tax: $1.15/pack

Personal Income Tax

Tax Rates: Low-2.2%; High 6.95% Income Brackets: Lowest- $2001 to $5001; Highest $60,000

Number of Brackets: 6

Tax Credits: Single-$110 • Married-$220 Dependents-$11O • Over 60 take additional $110

Standard Deduction: $3250 if single; not itemizing, $6500 if married filing jointly; not itemizing.

Medical/Dental Deduction: None

Federal Income Tax Deduction: None

Retirement Income Taxes: Social Security and Railroad Retirement Benefits are exempt. Tax payers 60 years old and older may exclude $12500 of investment and qualified pension income. Out of State government pensions qualify for the pension exemption. Under age 60, $2000 is exempt.

Retired Military Pay: Under 60 years of age $2000 is exempt, 60 years of age or over $12500 is exempt.

Military Disability Pay: Disability portion-Length of service pay- Member as of September 24, 1975- no tax; Member after September 24, 1975-taxed, unless combat incurred.

Retired pay based solely on disability: Member on as of September 24, 1975-no tax; member after September 24, 1975-taxed, unless all pay is based on disability and disability resulted from armed conflict, extra hazardous service, simulated war or an instrumentality of war.

VA Disability: Dependency and Indemnity Compensation: Not subject to state or federal income tax.

Property Taxes: All real property is subject to tax unless specifically exempt. Personal property, tangible and intangible property is exempt. Real Estate is subject to county, school district, vocational school district and municipal taxes. The state offers various property tax relief programs for residents age 65 and older and for residents with disabilities. Homeowners age 65 and over may get a credit equal to one half of the school property taxes, up to $500.

Inheritance and Estate Taxes: In July 2005 the DE legislature eliminated the requirement to file a Delaware estate tax return for dates which the federal estate tax does not allow a credit for state death tax (currently 2005 thru 20I0). It also eliminated the special lien on the gross estate tax if the decedent dies on a date on which the federal estate tax does not allow a credit for state death taxes paid.

To contact the Property Tax Offices in New Castle County, call (302) 323-2600; Kent County, call (302) 736-2077 or Sussex County, call (302) 855-7760.

To contact the Delaware Division of Revenue, call 302-577- 8200 or visit www.state.de.us/revenue