Filing your Delaware state income tax return doesn’t have to be overwhelming, especially when you understand how taxable income, tax liability, and estimated tax payments all fit together. Whether you’re reporting retirement income, wages, or business profits, your federal return provides the starting point for completing Delaware forms. As residents and nonresident taxpayers register an online account with the Delaware Division of Revenue, you can track your refund status, view balance due details, and submit payments securely through e-filing or mail to the appropriate address.
You can avoid penalties and interest on late payments or underpaid estimates by accurately calculating taxable income and applying credits. If your estimated payment falls short of the required fraction of total tax liability (usually 90% of what you owe), underpayment penalties can accrue until you pay the remainder. Reviewing federal schedules, double-checking your numbers, and claiming all eligible credits—such as child care or earned income credits—reduces the chance of rejected returns and avoids the headache of amended filings later.
Following a structured process for gathering documents, choosing filing status, and completing every page of Form 200-01 or 200-02 will minimize errors and speed up your Delaware income tax filing. This guide outlines each step—from identifying your due date through tracking your refund or paying any balance—so taxpayers of all ages can access clear instructions and confidently meet every requirement. With careful preparation and timely submission, you’ll keep your account in good standing and make filing season as stress-free as possible.
Overview of Delaware State Income Tax for 2017
Who Needs to File
- Full-Year Delaware residents: Delaware residents whose taxable income exceeds state thresholds based on filing status and age must submit a state income tax return. Filing ensures you correctly calculate tax liability, avoid late payment penalties, and maintain an accurate account with the Division of Revenue.
- Part-year residents: If you lived in Delaware for only part of 2017 or earned income from Delaware sources while a non-resident, you must file. This requirement guarantees you only pay taxes on income subject to Delaware law, preventing underpayment interest and fees.
- Non-residents: Non-residents with gross income from Delaware sources—such as rental, business, or retirement income—must file a non-resident return. Filing protects you from underreporting income and helps claim credits for taxes paid to other states.
Key Deadlines for the 2017 Tax Year
- Filing deadline (May 1, 2018): Returns and estimated payment declarations are due by May 1, 2018. Missing this date can trigger late payment and filing penalties imposed on any outstanding balance.
- Extension deadline (October 15, 2018): Filing an extension using Form 1027 gives you until October 15, 2018, to submit your return, but it does not extend the payment deadline. Interest continues to accrue on any unpaid balance after May 1.
- Estimated tax payment due dates: Delaware requires quarterly estimated payments on April 30, June 15, September 17, and January 15, 2019. Making these payments on time helps reduce penalties and interest for underpayment.
Important Changes and New Contribution Checkoffs
- New fund checkoffs: For 2017, Delaware added several checkoff options—such as the Veterans Trust Fund and the Delaware Natural Resources Fund—allowing taxpayers to support state programs directly. These voluntary declarations let you claim credits on your return while contributing to causes you care about.
- Continued e-filing expansion: Electronic filing remained the recommended method, with an average refund status update available within nine days. E-filing reduces processing errors, speeds up refund issuance, and provides online access to your return status.
What Forms to Use for Tax Filing
Primary Individual Income Tax Forms
- Form 200-01 (Resident Individual Income Tax Return): Use this form if you were a full-year Delaware resident or part-year resident electing resident treatment. Filing Form 200-01 guarantees you correctly report all retirement income, wages, and other taxable sources.
- Form 200-02 (Non-Resident Individual Income Tax Return): Non-residents with Delaware-source income must file Form 200-02. Part-year residents may use it when it is more advantageous, as it helps allocate income subject to Delaware tax and claim prorated exemptions.
Common Schedules and Additional Forms
- Schedule A (PIT-RSA): Itemized Deductions: If you itemize rather than claim the standard deduction, use Schedule A to report deductible expenses. This can lower your taxable income and overall tax liability.
- Schedule I (Multi-State Credits): Use Schedule I to claim credits for taxes paid to other states, reducing your Delaware tax owed and preventing double taxation on the same income.
- Schedule II (Earned Income Tax Credit): Delaware offers a credit equal to 20% of your federal earned income credit, which you report on Schedule II to reduce your state tax liability.
- Schedule III (Adjustments and Modifications): Report additions (like non-Delaware bond interest) and subtractions (such as Social Security benefits) on Schedule III to adjust federal AGI for Delaware purposes.
- Form 329: Lump Sum Distribution: Calculate tax on lump-sum distributions—such as retirement plan rollovers—using Form 329 to ensure proper withholding and avoid underpayment penalties.
- Form 700: Special Credits: You can apply for economic development and other targeted credits on Form 700 to lower your state tax bill and support business growth.
- Form 1027 (Automatic Extension): File Form 1027 by May 1 to extend your filing deadline to October 15. Note that payment is still due by May 1 to avoid late penalties.
- Form DE2210 (Underpayment Penalty for Estimated Taxes): If you underpay estimated taxes, use Form DE2210 to calculate any penalties and interest owed. This will help you reconcile your balance with accuracy.
Small Business Forms
- Form 300 (Partnership Return): Partnerships report income, deductions, and credits on Form 300. It issues Schedule K-1 to partners, who then include their share on individual returns.
- Form 1100S (S Corporation Return): S corporations use Form 1100S to report taxable income, losses, and credits. Shareholders receive Schedule K-1 for their portion of pass-through items.
- Schedule K-1 (Shareholder/Partner Income): This schedule details each owner’s share of income, credits, and deductions, which you need to complete your individual federal and state returns.
- Form 200C (Composite Return): Qualifying non-resident shareholders and partners may file Form 200C as a composite return, simplifying the filing process by consolidating multiple non-resident returns into one.
Step-by-Step Instructions to Complete Your Return
Step 1: Gather Required Documents
- Federal return: Your completed IRS Form 1040, 1040A, or 1040EZ provides the basis for Delaware adjustments and calculates your starting taxable income.
- W-2 and 1099 forms: Collect all W-2s for wages and 1099s (1099-R, -INT, -DIV, etc.) to report income subject to Delaware tax accurately.
- Other state returns: If claiming credit for taxes paid elsewhere, have your other state tax returns on hand to complete Schedule I.
- Federal schedules: Bring any applicable federal schedules (A, B, C, D) so you can transfer itemized deductions and business income to Delaware forms.
- Child care and real estate documents: Keep Form 2441 for child care credits and Form 5403 if you paid Delaware real estate estimated payments, ensuring you claim all eligible credits.
Step 2: Choose Your Filing Status
- Single: Use this status if unmarried on December 31, 2017. It determines your standard deduction and tax brackets.
- Married Filing Jointly: Married couples combine income and exemptions on one return, often resulting in a lower combined tax liability.
- Married Filing Separately: Spouses file individually when separate reporting yields a lower tax or when liability separation is desired.
- Married Filing Combined Separate: Two returns on one form allow spouses to maintain individual liability using a single document.
- Head of Household: Available if you qualify under federal rules and pay over half the cost of maintaining a home for a qualifying dependent.
Step 3: Complete the Back of Form 200-01 First
Begin with Section A (income), then Section B (adjustments), and finally Section C (deductions). Completing the back first ensures your AGI, credits, and deductions flow correctly to the front page for accurate tax computation.
Step 4: Calculate Your Delaware Adjusted Gross Income
- Additions: Include interest from non-Delaware bonds and any federal tax refunds deducted on your federal return to ensure your state AGI reflects Delaware law.
- Subtractions: Remove Social Security and Railroad Retirement benefits, U.S. government obligation interest, and up to $12,500 of pension income (age 60+) to lower your taxable income.
Step 5: Determine Your Deduction Method
- Standard deduction: Single and head of household filers claim $3,250; married filing jointly claim $6,500. This simplifies completing your return if itemized deductions are low.
- Additional deduction: Taxpayers age 65 or blind qualify for an extra $2,500 (up to $5,000 per person), further reducing your taxable income without itemizing.
Step 6: Calculate Personal Credits
- Basic personal credit: You receive $110 per exemption on your federal return, directly reducing your Delaware tax owed.
- Senior credit: Taxpayers age 60 or older on December 31, 2017, qualify for an additional $110 credit per person, helping lower tax liability for retirees.
Step 7: Apply Available Tax Credits
- Volunteer firefighter credit: Active volunteer firefighters claim a $400 credit, supporting community safety and lowering state income tax.
- Child care credit: Delaware offers 50% of your federal child care credit (up to $1,050), moving tax relief directly onto your state return.
- Earned Income Tax Credit: Claim 20% of your federal earned income credit on Delaware Schedule II to reduce tax liability if you meet income thresholds.
- Other state tax credit: Report taxes paid to other states on Schedule I to avoid double taxation and reduce your Delaware balance due.
Common Mistakes to Avoid
- Using outdated forms: Filing with prior-year forms delays processing and can lead to rejected returns.
- Forgetting attachments: Missing W-2s, 1099s, and federal return pages can trigger processing errors and interest charges.
- Misreporting city wage tax: Including city taxes in state withholding inflates your credit and may result in audit adjustments.
- Unsigned returns: A missing signature or date renders your return incomplete and subject to return or rejection.
- Combined filings in one envelope: Joint and separate returns require separate envelopes to ensure correct processing and avoid mix-ups.
- Over-claiming credits: Delaware limits credits to federal exemptions; excess credits can be disallowed, increasing your balance due.
How to File Your Return
Electronic Filing (Recommended)
Delaware strongly encourages e-filing through the Division of Revenue website. E-filing reduces errors, provides immediate status access, and issues refunds in an average of nine days. You can e-file at no cost through the state portal or use commercial software offering free filing for eligible taxpayers.
Paper Filing
If you prefer paper, mail your return to the appropriate address:
- Balance due returns
State of Delaware
Division of Revenue
P.O. Box 508
Wilmington, DE 19899-0508
- Refund returns
State of Delaware
Division of Revenue
P.O. Box 8710
Wilmington, DE 19899-8710
- Neutral returns (no balance due/refund)
State of Delaware
Division of Revenue
P.O. Box 8711
Wilmington, DE 19899-8711
Ensure you use the correct mailing address to prevent processing delays or misrouted returns.
How to Make a Payment
Online Payment Options
- Credit card payments: Delaware accepts American Express, Discover, MasterCard, and Visa. Each transaction costs $2,500, but the money is applied immediately to your account balance.
- Electronic bank transfer (ACH): ACH payments have no dollar limit and allow you to schedule payments before deadlines, ensuring timely estimated or balance payments.
Payment Deadlines
- Regular filing payment: This payment is due by May 1, 2018. Failure to pay will trigger a late payment penalty of 1% per month on the outstanding balance.
- Extension payment: Even with an extension, payments remain due May 1 to avoid interest and penalties.
- Estimated tax payments: Four quarterly deadlines (April 30, June 15, September 17, and January 15) help you spread your liability and avoid large lump-sum payments.
How to Track Your Refund or Balance Due
Online Refund Status Checker
- Visit the Delaware Division of Revenue website and select “Check the Status of Your Refund.”
- Enter your Social Security number and expected refund amount to view real-time status updates.
Phone Inquiry Process
Call the automated refund line at (866) 276-2353. Follow prompts to access your refund or balance's due status without waiting for live assistance.
Typical Processing Times
- Electronic returns: Less than nine days on average
- Paper returns: More than 14 days on average
- Returns requiring additional documentation: Four to six weeks or longer
Final Filing Checklist
- Completed return with all applicable lines filled out: Ensure every line on your state income tax return reflects your taxable income, credits, and deductions to avoid rejections or delays.
- Signatures and dates from all required parties: Sign and date each form page—especially if filing jointly or for a business—to certify accuracy and prevent penalties for failure to sign.
- W-2, 1099, and federal return pages attached: Please include all federal return pages, W-2s, and 1099s to assist the Division of Revenue in verifying your income, retirement income, and estimated payment records.
- Applicable Delaware schedules and forms included: Attach Schedules A, I, II, III, or business forms (e.g., 300, 1100S) to document additions, subtractions, and tax liability calculations subject to Delaware law.
- Form 2441 and other credit-related documents enclosed: Provide proof for credits—such as child care or volunteer firefighter—by enclosing Form 2441, Form 700, and other supporting declarations.
- Correct mailing address used: Mail paper returns or checks to the address matching your balance status (due, refund, or neutral) to ensure proper delivery to the revenue office.
- Payment is included if you owe a balance: Include payment via check, ACH, or credit card for any balance due to avoid late payment penalties and interest imposed after the due date.
- Copies of all materials are kept for your records: Retain copies of your completed forms, schedules, and correspondence so you can access your account history and respond to any future inquiries.
Frequently Asked Questions
What if I missed the May 1 deadline?
Missing the May 1 filing deadline results in a late filing penalty of 5% per month on your unpaid balance and a 1% late payment penalty (capped at 25%). Interest accrues at 0.5% monthly on any unpaid tax. Filing as soon as possible helps you avoid additional penalties; if you are due a refund, you will not incur fees, but you must file within three years to claim it.
Can I e-file for free?
Delaware’s official e-filing portal offers free electronic filing for individual taxpayers. The system is available 24/7, provides immediate submission confirmation, and accelerates refund processing—often issuing refunds in under nine days. Filing electronically reduces errors, confirms your account status online, and helps avoid rejected returns and late payment penalties. This service simplifies completing state returns.
What deductions do Delaware taxpayers commonly miss?
Many filers overlook the $12,500 pension exclusion for residents age 60 or older, the complete exclusion of Social Security and Railroad Retirement income, and the additional standard deduction of $2,500 for those 65 or blind. They also forget to claim U.S. government interest exclusions and other state tax credits for taxes paid elsewhere.
How do I request an extension?
Please submit Form 1027 by May 1, 2018, for an automatic extension to October 15. Note that this extends only the filing deadline—not the payment date—so estimate and pay any tax owed by May 1 to avoid interest and penalties. Extensions can be filed online or by mail. Filing online promptly updates your account status.
Can I file jointly if I moved mid-year?
Yes, part-year residents who moved into or out of Delaware can file as full-year residents on Form 200-01 or choose Form 200-02 as non-residents. Prepare both returns to see which yields the lowest tax liability. Some credits, like the Earned Income Tax Credit, are available only on resident returns. This decision affects balance and penalties.
Do I need to file if I only have Social Security income?
Social Security and Railroad Retirement benefits are excluded from Delaware taxable income. If these are your sole income sources and you have no other Delaware-source income, you generally aren’t required to file a state return. However, always verify thresholds and filing requirements before deciding not to file.
