How to File Your Delaware Tax Return for 2023

Navigating Delaware's tax system does not have to be a headache. Whether you are a first-time filer, a resident, or managing a small business, knowing where to start and what forms to file is half the battle. Delaware’s tax structure is designed to be accessible, but understanding the details is key to ensuring your return is accurate and filed on time.

Delaware’s state and local tax collections contribute significantly to the state's operations, with $6,668 collected per capita. That revenue helps fund essential services, even as Delaware faces challenges such as an $8,417 per capita state and local debt. Despite these figures, Delaware's public pension plans are 88 percent funded, indicating a strong, stable foundation for the state’s future.

This guide will walk you through filing your Delaware tax return for 2023, providing clear, step-by-step instructions. From determining if you need to file to filing your return on time and tracking your refund, this guide covers everything, ensuring you are prepared to file confidently.

Who Needs to File Their Delaware Tax Return in 2023?

Understanding whether you need to file a Delaware tax return is the first step in the process. In 2023, Delaware residents, part-year residents, and non-residents with Delaware-source income must file a tax return if their income exceeds certain thresholds.

Full-Year Delaware Residents

If you are a full-year resident of Delaware, you need to file a tax return if your Delaware adjusted gross income (AGI) exceeds the following amounts based on your age and filing status:

• Single (Status 1):
  
  • Under 60: $9,400
  • 60-64 years: $12,200
  • 65 or blind: $14,700
  • 65+ and blind: $17,200
• Married Filing Joint (Status 2):
  
  • Under 60: $15,450
  • 60-64 years: $17,950
  • 65 or blind: $20,450
  • 65+ and blind: $22,950
• Married Filing Separate (Status 3):
  
  • Under 60: $9,400
  • 60-64 years: $12,200
  • 65 or blind: $14,700
  • 65+ and blind: $17,200
• Head of Household (Status 5):
  
  • Under 60: $9,400
  • 60-64 years: $12,200
  • 65 or blind: $14,700
  • 65+ and blind: $17,200

Part-Year Residents

If you were a part-year resident of Delaware, you must file a tax return if:

• You had income from any source while a Delaware resident, or
• You had Delaware-source income while a non-resident.

Non-Residents

Non-residents must file a tax return if they earned Delaware-source income during 2023, even if they do not reside in Delaware. This includes individuals who live in neighboring states but work in Delaware or earn income from Delaware businesses or property.

Even if your income falls below these thresholds, you may still want to file a return if you qualify for refunds or credits or to meet other specific requirements.

Key Deadlines for Filing Delaware Taxes in 2023

Knowing the deadlines for filing your Delaware tax return is crucial to avoid penalties and interest. Here are the key dates to keep in mind for 2023 Delaware state taxes:

Regular Filing Deadline

• The deadline for filing your Delaware tax return for 2023 is April 30, 2024.
• If you file after this date, you may face penalties and interest on unpaid taxes.

Extension Filing Deadline

• If you need more time to prepare your tax return, you can file for an automatic extension using Form PIT-EXT.
• The extension allows you to file until October 15, 2024, but it does not extend the deadline to pay any taxes owed. To avoid interest charges, any balance due must still be paid by April 30, 2024.

Penalties for Late Filing

• If you miss the filing deadline on April 30, 2024, you will incur a penalty of 5% of the balance due each month if the return is late.
• Interest accrues at a rate of 0.5% per month on unpaid taxes.

Paying Your Taxes

• If you owe taxes, pay by April 30 to avoid additional charges.
• The Delaware Division of Revenue provides several payment options, including online payments via the Delaware Taxpayer Portal.

By staying on top of these deadlines, you can ensure your Delaware tax return is filed correctly and on time, avoiding unnecessary penalties or interest.

The Forms You Need to File Your Delaware Tax Return

Filing your Delaware tax return involves using the appropriate forms based on your residency status and income type. Here’s an overview of the key forms you will need:

For Full-Year Residents and Part-Year Residents

• Form PIT-RES (Resident Return):
  
  • Use this form if you were a full-year or part-year resident who chooses to file as a resident.
  • This form covers Delaware state income tax for residents, including those with multiple income sources.

For Non-Residents

• Form PIT-NON (Non-Resident Return):
  
  • Use this form if you were a non-resident with Delaware-source income (e.g., income from Delaware property, businesses, or employment in Delaware).
  • Part-year residents can also use this form if they file as non-residents for any part of the year.

Common Schedules and Supporting Forms

• Delaware Schedule A (PIT-RSA): If you choose to itemize Delaware return deductions, you must complete this schedule. This may include deductions for mortgage interest, medical expenses, and charitable contributions.
• Delaware Schedule I: This form provides a credit for income taxes paid to another state, which can help prevent double taxation if you work in one state and live in Delaware.
• Delaware Schedule II: This schedule is used to claim the Earned Income Tax Credit (EITC), which can reduce the amount of tax you owe if you meet certain income and filing requirements.
• Delaware Schedule III: This form reports contributions to special funds, such as donations to the Delaware Cancer Fund, Alzheimer’s Disease Fund, or other state-run charitable initiatives.
• Form PIT-EXT: If you need more time to file, this is the form to request an automatic extension. Remember, while the extension gives you more time to file, it doesn’t extend the time to pay any taxes owed.
• Form PIT-UND: This form helps calculate any underpayment of estimated yearly taxes. It’s required if you didn’t have enough taxes withheld from your income and need to make an additional payment.

Where to Find Forms

The Delaware Division of Revenue website provides access to all official forms and the most up-to-date versions of required documents.

Using the proper forms and ensuring all supporting schedules are complete can help you avoid mistakes and file your return correctly.

Step-by-Step Instructions for Filing Your Delaware Tax Return

Filing your Delaware tax return may seem complex, but it becomes much easier by breaking it down into manageable steps. Here’s a step-by-step guide to help you file your return accurately and on time.

Step 1: Gather Your Necessary Documents

Before you begin filing your Delaware tax return, make sure you have the following documents ready:

• Federal Form 1040 (pages 1 and 2): Delaware’s tax calculation starts with your federal adjusted gross income (AGI), so you’ll need this form.
• W-2 forms: These show the income you earned as an employee and the taxes withheld.
• 1099 forms: These include any other income you received, such as freelance or self-employment income, interest, or dividends.
• 1099-R forms: For reporting pension distributions.
• Estimated Tax Payment Records: Include the records of any estimated tax payments made during the year.
• Documentation for Deductions and Credits: Gather the necessary receipts and documents to claim deductions (like mortgage interest or charitable donations).

Step 2: Choose Your Filing Method

Delaware offers two primary filing methods:

• Electronic Filing (e-filing): E-filing is the fastest and easiest way to file your Delaware tax return. It’s free through the Delaware Taxpayer Portal, and you’ll receive an electronic confirmation once your return is submitted. The benefits include:
  
  • Faster processing: Refunds in as little as 10 days.
  • Direct deposit: Choose to have your refund directly deposited into your bank account.
  • Reduced errors: The e-filing system checks for common mistakes automatically.
• Paper Filing: If you prefer to file by mail, you can download the necessary forms from the Delaware Division of Revenue website. Double-check your return for errors before mailing it to the correct address (refer to the “How to File Your Return” section for mailing details).

Step 3: Complete Your Federal Return First

Delaware’s tax calculation begins with your federal adjusted gross income (AGI). You must complete your federal return before starting your Delaware return. Ensure your federal return is accurate, as any errors here can carry over to your Delaware filing.

Step 4: Fill Out the Delaware Tax Return Form

• Name and Address: Ensure you enter your information exactly as it appears on your federal return.
• Filing Status: Choose the filing status that matches your federal return. Delaware offers the same status options (single, married filing jointly, etc.)
• Income Section: Start with your federal AGI (Line 1) and adjust for Delaware-specific items, such as:
  
  • Adding interest from non-Delaware state obligations.
    
    
  • Subtracting exempt U.S. government interest and pension exclusions.
    
    
• Deductions: Delaware offers a standard deduction or the option to itemize. For 2023, the standard deduction is:
  
  • $3,250 for single or married filing separately
  • $6,500 for married filing jointly or head of household
• Use Delaware Schedule A (PIT-RSA) to report your deductions if you itemize.

Step 5: Calculate Tax and Credits

Once you’ve entered your income and deductions, it’s time to calculate your Delaware tax liability. Delaware uses a graduated tax rate, meaning the higher your tax rate will be, the more you earn. You can find the Delaware tax tables or rate schedules in the instructions for your form.

Be sure to apply any available credits, such as:

• Earned Income Tax Credit (EITC): Available for low-income residents.
• Child and Dependent Care Credit: If you have children or dependents and paid for childcare.
• Credit for Taxes Paid to Other States: Delaware may allow you to claim a credit to avoid double taxation if you paid taxes to another state.

Filing Methods – E-File vs Paper Filing

When submitting your Delaware tax return, you have two primary options: e-filing or paper filing. Both methods have advantages; understanding them will help you choose the best approach.

Electronic Filing (e-filing)

E-filing is the recommended method for filing your Delaware tax return for several reasons:

• Faster Processing: E-filed returns are processed much faster than paper returns. If you file electronically and select direct deposit, you could receive your refund in as little as 10 days.
• Direct Deposit: With e-filing, you can deposit your refund directly into your bank account, making the process more convenient.
• Reduced Errors: The Delaware Taxpayer Portal automatically checks your return for common mistakes, helping to avoid costly errors that could delay your refund or require a corrected return.
• Security: E-filing through the Delaware Taxpayer Portal ensures your information is submitted securely, protecting your personal and financial details.
• Immediate Confirmation: Once your return is submitted, you’ll receive confirmation that your Delaware tax return has been filed successfully.

If you’re filing a simple return, e-filing is the quickest and safest option. For those who qualify for free e-filing through Delaware’s online platform, it’s always the best option.

Paper Filing

While e-filing is quicker and more efficient, paper filing is still an option for those who prefer it or cannot file online. Here’s what you need to know about filing on paper:

• Longer Processing Time: Paper returns generally take 6-8 weeks to process. Refunds from paper returns can take up to 12 weeks, much longer than the 10-day turnaround for e-filed returns.
• Mailing Your Return: Once completed, you must send your paper return to the correct Delaware Division of Revenue address. Check the Delaware Taxpayer Portal for the correct address based on whether you owe taxes or expect a refund.
• Potential for Mistakes: Paper filing leaves room for human error, such as missing signatures, incorrect addresses, or math mistakes. These mistakes could delay your refund or require an amended return.

Which Method Should You Choose?

• If you want your Delaware tax return processed quickly and securely, e-filing is the best choice.
• If you prefer paper filing or don’t have access to the internet, paper filing is still an option, though expect a longer processing time.

For most people, e-filing is the easiest and most efficient way to file taxes. However, if you’re filing a more complex return or have exceptional circumstances, paper filing may still be your best route.

How to Track Your Refund or Check Your Status

Once you've filed your Delaware tax return, the next step is to keep track of your refund or check the status of your state return. Delaware makes it easy to monitor the progress of your return using online tools.

Tracking Your Refund

If you expect a refund from Delaware, you can check its status anytime using the Delaware Taxpayer Portal. Here’s how:

• Visit the Refund Status Tool: The Delaware Division of Revenue provides a dedicated online tool to check the status of your refund.
• Required Information: To track your refund, you’ll need:
  
  • Your Social Security Number (or ITIN).
  • Your expected refund amount.

The tool will let you know if your Delaware tax return has been processed and when you can expect to receive your refund. Most refunds are issued within 10-12 weeks if filed electronically, and up to 12 weeks for paper returns.

Checking the Status of Your Tax Return

If you want to know whether your Delaware tax return has been filed and processed, you can also use the Delaware Taxpayer Portal:

• Check Your Filing Status: The portal will show whether your return has been processed, rejected, or accepted.
• Rejected Returns: If your return was denied, the portal will provide you with a reason, allowing you to correct the issue and resubmit your return.

What to Do if Your Refund is Delayed

While most refunds are processed quickly, sometimes there may be delays due to errors in your return or additional processing requirements. If your refund is delayed, you can:

• Check for Errors: Ensure that all information on your return is accurate, especially your federal return information and income details.
• Contact Support: If your Delaware tax return has been processed but the refund is still delayed, contact the Delaware Division of Revenue for assistance.

Using these tools, you can easily track your Delaware tax return and stay updated on the status of your refund.

Common Mistakes to Avoid When Filing Your Delaware Tax Return

Filing your Delaware tax return correctly is crucial to avoid delays, penalties, or having your tax return rejected. Even minor errors can cause your return flagged for correction, slowing the process and potentially costing you money. Here are some common mistakes to watch out for and tips for avoiding them:

1. Forgetting to Sign Your Return

One of the most common mistakes when filing your Delaware tax return is forgetting to sign it. An unsigned return is considered incomplete and will be rejected by the Delaware Division of Revenue. Double-check that you’ve signed and dated your tax return before submitting it. For joint returns, both spouses must sign.

2. Using the Wrong Form

If you're filing as a part-year resident or a nonresident, you must use the correct form: Form PIT-RES for residents or Form PIT-NON for nonresidents. Filing the wrong form can delay processing or lead to a rejected return. Ensure you use the correct state return form based on your residency status. If unsure, refer to the Delaware Division of Revenue website for guidance.

3. Incorrect Federal AGI

Your Delaware tax return begins with your federal return, and any discrepancies between the two can cause issues. If your federal AGI is wrong or doesn’t match the information on your federal return, your Delaware tax return will be flagged for corrections. Double-check your federal return before entering your AGI on your Delaware tax return to ensure they match exactly.

4. Missing or Incorrectly Reporting Income

Whether you're an employee receiving a W-2, a freelancer with 1099 income, or a business owner, failing to report all sources of income can lead to penalties and interest on unpaid taxes. This is a key area where Delaware looks for accuracy. Make sure all income is reported, including income from Delaware sources. Check your W-2 and 1099 forms carefully to avoid mistakes.

5. Incorrect Mailing Address

If you’re paper-filing, using the wrong address can cause delays in processing your return or receiving your refund. Different mailing addresses are based on whether you owe taxes or expect a refund. Refer to the Delaware Division of Revenue instructions to ensure you're mailing your return to the correct address based on your situation.

6. Not Claiming All Available Deductions and Credits

Many filers miss valuable deductions and credits that can reduce their tax liability. For instance, you should claim these credits if you're eligible for the Earned Income Tax Credit (EITC) or the credit for taxes paid to another state. Review all available Delaware credits, such as the EITC, and claim any you qualify for. If unsure, consider using tax preparation software or consulting a tax professional.

7. Late Filing or Payment

Missing the filing deadline or failing to pay any owed taxes on time will result in penalties and interest charges. These charges can quickly add up, especially if you file months after the deadline. Make sure to file your Delaware tax return by April 30, 2024, or apply for an extension using Form PIT-EXT. If you owe taxes, pay as much as possible by the deadline to minimize interest.

8. Not Keeping Copies of Your Tax Return

After filing, keeping copies of your Delaware tax return and all supporting documents for at least three years is essential if you are audited or need to amend your return. Keep a copy of your state tax return, federal return, and any relevant forms or receipts for your records.

By avoiding these common mistakes, you can ensure your Delaware tax return is processed smoothly, minimizing the chances of a rejected return and reducing unnecessary penalties or delays.

Frequently Asked Questions (FAQs)

What should I do if I miss the April 30 filing deadline?

If you miss the April 30 deadline for your state income tax return, you should still file taxes as soon as possible to minimize penalties and interest. Late filing incurs a penalty of 5% of the balance due each month, and interest is charged at 0.5% per month. You can file for an extension if you need more time to prepare.

Can I e-file my Delaware tax return for free?

Delaware allows you to e-file your income tax return for free through the Delaware Taxpayer Portal. This method is the fastest and most secure way to file, offering benefits like immediate confirmation and the option for direct deposit of your refund. E-filing also minimizes errors, making it an efficient choice for filing your state income tax return.

How can I track my personal income tax return refund?

To track the status of your Delaware income tax return or your refund, visit the Delaware Taxpayer Portal. You’ll need your Social Security Number (or ITIN) and the expected refund amount to check the status. This tool lets you see if your federal return affects your Delaware tax return refund.

Are there any standard deductions I should claim when filing my Delaware taxes?

When preparing your Delaware income tax return, you must claim deductions that reduce your taxable income. Many taxpayers miss the pension exclusion (up to $12,500 for those over 60) and Delaware 529 plan contributions. These deductions can significantly reduce your income tax liability, so check all applicable sections to claim these benefits and avoid overpaying.

What if I need to file an amended return for Delaware income tax?

If you discover an error on your Delaware income tax return after submitting it, you can file an amended return using Form PIT-AX. This should be done within 90 days of any federal return changes that affect your Delaware income tax return. Filing an amended return allows you to correct your taxable income and ensure that your income tax is accurately calculated.