Monday, September 26, 2022

When Are Delaware State Taxes Due

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Getting Your Delaware Tax Refund

Delaware LLC Franchise Tax Due Tuesday, June 1, 2021 | Delaware Business Incorporators, Inc.

If your state tax witholdings are greater then the amount of income tax you owe the state of Delaware, you will receive an income tax refund check from the government to make up the difference.

It should take one to three weeks for your refund check to be processed after your income tax return is recieved. E-filing your return and filing early can help ensure your refund check gets sent as quickly as possible.

Once you’ve filed your tax return, all you have to do is wait for your refund to arrive. If you want to check the status of your Delaware tax refund, you can visit the Delaware Income Tax Refund page.

Delaware Capital Gains Tax

Most capital gains in Delaware are taxable at the full personal income tax rates listed above. This applies to both long- and short-term capital gains. However, gains realized from real estate sales in Delaware by those who live in another state are taxed at a rate of 6.6%. This rate applies to the gain less any selling expenses.

How Do I File A State Tax Extension

Each state has its own requirements for tax extensions. Some allow automatic extensions to file without having to file;a form to request one, whereas;some do require you to file a request.;

Keep in mind a;tax;extension simply gives you more time to file. It does not;provide an extension;of time;to pay taxes you owe.

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Understanding Which Taxes Apply To Your Delaware Llc

Fortunately for LLC owners, the annual tax is straightforward. Every Delaware LLC, limited partnership, and general partnership must pay $300 per year, due annually by June 1. Calling this annual tax a “franchise tax” does not mean that your company is an actual franchise business.

LLCs may choose to be treated as an S corporation for tax purposes. While this may have benefits in other respects, an LLC that elects corporation status must also pay Delaware’s corporate income tax.

To claim S corporation tax status for your LLC, you first have to file a special form with the IRS. An S corporation is not subject to federal taxes, the way a traditional C corporation would be.

Instead, the taxable income generated by an S corporation is passed to individual shareholders. Shareholders must pay federal taxes on their shares when they file their personal taxes.

Unemployment Payments Exempt From State Taxes

Delaware Franchise Taxes and Annual Reports

Delaware workers who filed for unemployment in 2020 won’t have to pay state taxes on those benefits, thanks to an exemption that lawmakers made.

Residents filling out a Delaware income tax return should put the amount of unemployment benefits that they received in 2020 on line 36.

Nonresidents;filling out a Delaware income;tax return should put the amount of unemployment benefits that they received in 2020 on line 25.

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Delaware Income Tax Filing Deadline Extended To May 17

The deadline for Delaware taxpayers to file and pay their 2020 personal income tax returns to both federal and state governments has been extended from Thursday, April 15 to Monday, May 17.

This extension does not apply to estimated tax payments made quarterly by individuals; those payments will still be due by Friday, April 30. The deadline extension also does not apply to corporate or fiduciary income tax returns.

Under Delaware law, the director of the Division of Revenue has the ability to grant reasonable extensions of time for the payment of any tax or estimated tax when deemed appropriate. Considering the effects of the pandemic, Revenue Director Jennifer Noel has determined that it is appropriate to grant extensions similar to those recently granted by the Internal Revenue Service. Details are outlined in a new Tax Information Memorandum available on the agency website at revenue.delaware.gov.

As always, the Division of Revenue encourages taxpayers to file as soon as possible, once they have the necessary information required to do so. The payment deadline of May 17 will not be further extended, so taxpayers should note that penalties and interest on underpayments will be calculated from that date, even if they request additional time to file.

For more information, call 302-856-5358 or email .

Total Estimated 2020 Tax Burden

Our income tax calculator calculates your federal, state and local taxes based on several key inputs: your household income, location, filing status and number of personal exemptions. Also, we separately calculate the federal income taxes you will owe in the 2020 – 2021 filing season based on the Trump Tax Plan.

Read Also: Will I Get Any Money Back From My Taxes

Have New Employees Complete Withholding Tax Forms

All new employees for your business must complete a federal Form W-4. Due to the difference between federal and state deductions and credits, it may be necessary for an employee to claim either an additional number or a lesser number of withholding allowances for state purposes. In those cases, the employee must provide Form W-4 and indicate separately on the form the number of allowances claimed “for State of Delaware Purposes.” To estimate the number of state withholding allowances, new employees may use Form SD/W-4A, Withholding Allowance Computation Worksheet. You can download blank Form SD/W-4As from the business tax forms section of the DOR website. You should keep the completed forms on file at your business and update them as necessary.

The Delaware Income Tax

How Does Delaware’s State Income Tax Compare to Neighboring States?

Delaware collects a state income tax at a maximum marginal tax rate of %, spread across tax brackets. Unlike the Federal Income Tax, Delaware’s state income tax does not provide couples filing jointly with expanded income tax brackets.

Delaware’s maximum marginal income tax rate is the 1st highest in the United States, ranking directly below Delaware’s %. You can learn more about how the Delaware income tax compares to other states’ income taxes by visiting our map of income taxes by state.

Local tax rates are excluded in Delaware and 14 other states that have county or city level income taxes. In Delaware the average income tax rate for counties and large municipalities, weighted by total personal income within each jurisdiction, is 0.16% .

If you have a question about your Delaware tax return, you can contact the Delaware Department of Finance via email at or call the general income tax helpline at 302-577-8200. For refund assistance call 302-577-8784, and for assistance with monthly installments call 302-577-8586.

There are -520 days left until Tax Day, on April 16th 2020. The IRS will start accepting eFiled tax returns in January 2020 – you can start your online tax return today for free with TurboTax .

Read Also: Where Can I Find My Real Estate Taxes

Delaware Division Of Revenue Extends Business Personal Tax Deadlines To July 15

The Delaware Division of Revenue announced that the deadline for taxpayers to file their 2019 Delaware personal income tax returns has been extended to July 15.

The decision comes as a response to the coronavirus crisis.

The ;Division of Revenue and the Internal Revenue Service remain open, and taxpayers are encouraged to continue to file their state and federal returns electronically or by mail.

DORs public service windows are currently closed, but staff are available to respond to taxpayer questions by e-mail. Inquiries may be sent to any of the email addresses listed;on our website. Staff of the revenue unit will respond by e-mail or phone.

Under Delaware law, the filing deadline for corporate income taxes is tied to the federal income tax due date which was recently extended to July 15, 2020.

The Director of the Division of Revenue has additional authority to grant reasonable extensions for other tax filings deemed to be appropriate.

Under a;Technical Information Memorandum ;Delaware ;has also extended income tax filing deadlines for corporate final, corporate tentative, estimated personal income taxes, and fiduciary income taxes due in April to July 15. All other returns remain due without extension.

Individuals who are unable to meet the July 15 filing deadline may file an extension request online on or before July 15 at, by email to;, or through their tax preparer.

Is My Franchise Tax The Same As My Annual Registered Agent Fee

The Delaware Franchise Tax and the Registered Agent Fee are two separate, unrelated fees. The annual Franchise Tax is imposed by the state of Delaware. The annual Registered Agent Fee is paid to Harvard Business Services, Inc. to act as an agent for your entity in the state.

Our annual Registered Agent Fee is $50 per year, and is due on the anniversary month of the formation of your company. It is the lowest Registered Agent fee in the industry, and it is guaranteed to remain fixed at $50 per year, as long as the fee is paid on time and your company remains in good standing with the state of Delaware.

Recommended Reading: How To Register For Tax Id

How Do I Calculate My Delaware Franchise Tax

The methods of calculating Delaware Franchise Tax are detailed below. Read on to find out how much youll pay, or visit our Delaware Franchise Tax calculator app for a quick answer.

The Franchise Tax for a Delaware LLC or Delaware LP;is a flat annual rate of $300.

The Franchise Tax for a corporation;is based on your corporation type and the number of authorized shares your company has. The total cost of the corporation’s Delaware Franchise Tax consists of an annual report fee and the actual tax due.

A non-stock/non-profit company is considered exempt by the state of Delaware. This type of company does not pay the annual tax but must still file and pay the annual report fee of $25 per year.

A corporation with 5,000 authorized shares or less is considered a minimum stock corporation. The Delaware annual report fee is;$50 and the tax is;$175 for a total of $225 due per year.

A corporation with 5,001 authorized shares or more is considered a maximum stock corporation. The annual report fee is;$50 and the tax would be somewhere between $200 and $200,000 per year, as illustrated below.

What Is Delaware Franchise Tax

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Franchise Tax is the fee imposed by the state of Delaware for the right or privilege to own a Delaware company. The tax has no bearing on income or company activity; it is simply required by the state of Delaware to maintain the good standing status of your company.

The term “Franchise Tax” does not imply;that your company is a franchise business. All companies pay a Delaware Franchise Tax, regardless of their business income, business model or company structure.

Read Also: How To File Taxes With No Income

Two Methods To Calculate Franchise Tax For A Maximum Stock Company

The state of Delaware uses this method to initially calculate your taxes. This method is calculated based on;the number of authorized shares. The calculation is as follows:

  • 5,000 shares or less: $175
  • 5,001 – 10,000 shares: $250
  • Additional 10,000 shares or portion thereof:;add $85
  • The maximum annual tax is $200,000

Don’t forget to add the $50 annual report fee to the Franchise Tax after it is calculated.

Assumed Par Value Capital Method

The state of Delaware allows you to pay the lower of the two calculation methods. Therefore, if you receive a tax bill for tens of thousands of dollars, it may be in your best interest to try calculating your Delaware Franchise Tax with the assumed par value capital method.

In order to utilize this filing method, you will need to provide the company’s total gross assets and the total number of issued shares. The tax is then often calculated to the minimum payment of $400 tax plus the $50 annual report fee, for a total of $450 due per year.

The calculation used for this method is more complex. For more information you can use our Delaware;Franchise Tax calculator

Do I Need To Submit Anything Else With My Tax Payment

Yes. Corporations must complete an annual report along with their Delaware;Franchise Tax payment. This report must list the company’s physical address ; the name and physical address of all directors; and, if there are any officers, the name, title and physical address of one of the officers.

If the Delaware Franchise Tax calculation uses the assumed par value capital method, the gross assets and issued shares are;also to be listed.;If you decide to pay your Delaware Franchise Tax for a corporation with us over the phone, the annual report would need to be separately submitted to us by , fax or mail.

Delaware LLCs do not have to complete the annual report, but still pay the $300 Delaware LLC Franchise Tax fee.

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Be Sure To File Your Annual Reports

For Delaware corporations, franchise taxes are due March 1st;of every year for the previous calendar year.; A company must pay its taxes by filing an annual report with the Secretary of State of the State of Delaware. ;You should file the report;online.; An officer of the company must enter and confirm the necessary information, which includes the physical address/location of the corporation, address of the registered agent in Delaware, a list of all directors and at least one officer, issued shares, and gross assets.; The online form will also calculate the correct franchise tax for you.; The online form defaults to the , but if you fill in gross assets it will use the Assumed Par Value method.

The actual payment of taxes is done with a credit card.; If a company owes more than $5,000 in franchise taxes, then it must make quarterly tax payments.; Those are due at the end of the second month following each quarter , and any positive balance goes towards next year. Failure to file by the deadlines will cause a company to fall out of good standing with the state, which can complicate, delay or even prevent a range of possible transactions, including fundraising transactions.

Tax Compliance Deadlines For Delaware C

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2020 tax deadlines are supplied for reference purposes only, and should not be used when making decisions in 2021 or beyond. Always consult your tax professional, and see our disclaimer below. These are for Delaware C-Corporations.;

  • Send 1099s to Contractors. Send W2s to Employees. 1099-MISC for nonemployee compensation must also be e-filed to IRS on this date.
  • File Form 8809 for a 30-day extension to file W2s and 1099-MISC for nonemployee compensation.
  • All US startups must send1095-B and 1095-C forms to Employees.

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Form 1120 Due Date 2021

In the year 2021, the federal tax filing date for c-corporations is April 15th . C-corps can file an extension with the IRS Form 7004.

On average, one to three of our clients are acquired each and every month, and we know the types of questions that the accounting firms at big, public companies are going to ask about . And compliance is a big one! Dont let a life-changing transaction get sidetracked by these types of issues. Of course, we recommend working with an experienced CPA like Kruze – talk to us now.

Business Return Electronic Filing Information

Business Electronic Filing Mandate;-;N/A – Delaware allows business taxpayers to mail or electronically file business returns.>/span>

Delaware currently support electronic filing for all business returns but does not support all years, or amended returns. The following tax returns and years can be e-filed.

Corporate returns – – current year and two prior years.

S Corporate returns – -;current year and two prior years.

Partnership returns – (Form 300 – Delaware;Partnership Return – current year and one prior year.

Fiduciary returns – – current year and two prior years.

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Check Your Payment Status

Taxpayers can access their property tax information and payment status online. Property owners who misplace or who do not receive their bills can download a printable version via the site, which also provides detailed account information including payment history and a breakout of specific charges for property, school, light, and crossing guard taxes. If your tax bills are paid by a mortgage company or bank, you are still responsible to make sure the bill is paid.

Here Are The Basic Rules On Delaware State Income Tax Withholding For Employees

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By David M. Steingold, Contributing Author

If your small business has employees working in Delaware, you’ll need to withhold and pay Delaware income tax on their salaries. This is in addition to having to withhold federal income tax for those same employees. Here are the basic rules on Delaware state income tax withholding for employees.

Also Check: What Is The Tax In Georgia

Do I Need To File Multiple State Tax Returns

You may need to file multiple state tax returns if you have moved within the last year, work in multiple states, or live and work in different states.;;;

In 2015, the U.S. Supreme Court ruled against double taxation meaning two or more states are no longer allowed to tax someone for the same income. If you work in a state that has a;reciprocal tax agreement;with your home state, you may be able to;submit;a document to your employer and avoid having taxes withheld from your paycheck. If the two states do not have a reciprocal agreement, you may need to prepare multiple state returns, but you will be refunded for unnecessary withholdings from your paychecks.;;

For more details about these;special circumstances, read;Living in One State, Working in Another.;

What If I Made More Than $10200 On Unemployment

You’re still required to pay federal taxes, but not state taxes.

The American Rescue Plan;exempted the first $10,200 in benefits received in 2020 from taxes for households with less than $150,000 in income.

STRUGGLING ON UNEMPLOYMENT:How Delaware’s low unemployment benefits take an ‘exhausting,’ ‘depressing’ toll

Also Check: How To Get Tax Exempt Status

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