How to File Your Delaware Tax Return for 2020: Step-by-Step Guide for Individuals and Small Businesses

For people and small business owners who made money in Delaware during the 2020 tax year, filing a Delaware tax return is a crucial step. Regardless of whether you are a non-resident, full-year, or part-year taxpayer with income from Delaware, knowing how to properly prepare and file your return can help you avoid penalties, save money, and avoid mistakes. This guide takes you step-by-step through the entire process, from obtaining the necessary paperwork to monitoring the status of your refund.

Delaware may have different tax laws from the IRS, so it will be simpler to comply with state laws if you finish your federal return first. You must gather necessary data, including your Social Security number, W-2 forms from your employer, and any schedules pertaining to your earnings or deductions. It will be simpler to finish the return accurately and prevent delays when filing online or by mail if you have these ready before you start.

The Delaware Division of Revenue offers multiple ways to file and pay taxes online or by paper, depending on your preference. You can access the appropriate forms, find answers to frequently asked questions, and file your return on time by following the instructions in this guide. Understanding the correct filing procedure will help you effectively manage your responsibilities and get in touch with the appropriate office if you require assistance, regardless of whether you anticipate a refund or owe a balance.

Understanding Delaware State Income Tax for 2020

Delaware requires many individuals to file a state tax return for the 2020 tax year. Whether you are a resident, part-year resident, or non-resident, the obligation to file depends on your income level, age, and filing status. Meeting these requirements ensures you fulfill your state tax obligations, avoid penalties, and prevent owing additional taxes in the future.

Who Needs to File

You must file a Delaware tax return if your Delaware adjusted gross income is equal to or greater than the thresholds below for your age and filing status:

Taxpayers under 60: If you are under the age of 60, you must file if your income is at least $9,400 as a single filer, head of household, or married filing separately. Married couples filing jointly must file if their combined income is $15,450. If you are claimed as a dependent on another person’s return, you must file if your income reaches $5,250.
Taxpayers aged 60–64: If you are between 60 and 64 years old, the threshold for filing is $12,200 for single filers, heads of household, or married individuals filing separately. Married couples filing jointly must file if they earn $17,950 or more. If you are a dependent, the filing requirement begins at $5,250.
Taxpayers 65 or older or blind: If you are 65 or older or legally blind, you must file separately if your income is $14,700 or more as a single filer, head of household, or married filing jointly. Married couples filing jointly have a higher threshold of $20,450. Dependents in this category must file if they have $7,750 or more in income.
Taxpayers 65 or older and blind: If you are both age 65 or older and legally blind, you must file if your income is $17,200 or more as a single filer, head of household, or married filing separately. Married couples filing jointly must file if they have $22,950 or more. Dependents must file if they earn $10,250 or more.

Residency Rules

Full-year residents must report all taxable income earned during the year, regardless of where it was earned.
Part-year residents must report income earned during the period they lived in Delaware and any Delaware-source income earned while living elsewhere.
Non-residents must file if they earned income from a Delaware source at any point during the tax year.

Special Considerations for Small Businesses

Small business owners operating as sole proprietors, partnerships, or S corporations generally report their business income on their tax returns. In these cases, preparing your federal return first to transfer accurate information to your Delaware return is important.

Once you confirm that you meet the filing requirements, the next step is to gather your forms, obtain documentation from your employer or financial institution, and prepare your return. This preparation will make completing your forms and filing much smoother.

Key Filing Deadlines and 2020 Tax Changes

Knowing the correct deadlines is critical when preparing your Delaware tax return for the 2020 tax year. Filing or paying late can result in penalties, added interest, and delays in refund processing.

Important Dates

Regular filing deadline: For 2020 tax returns, Delaware’s due date was April 30, 2021. You must file your return and pay any taxes owed by this date to avoid late penalties.
Extension deadline: If you filed for an extension using Form 200-EX by April 30, 2021, you were granted extra time to file your return until October 15, 2021. However, an extension to the filing did not extend the time to pay your taxes.
Estimated tax payment deadlines: Delaware requires estimated tax payments in four installments for 2020: April 30, June 15, September 15, 2021, and January 17, 2022. These dates applied if you expected to owe $800 or more for the year.

Key Tax Changes for 2020

Volunteer Firefighter Credit: The $400 credit remained available to qualifying volunteer firefighters in 2020.
Required Schedule A for itemized deductions: Taxpayers who itemized deductions for Delaware purposes had to complete and attach the Delaware Schedule A to their return.
Pension exclusion rules: Delaware continued to offer a pension exclusion of up to $12,500 for taxpayers aged 60 or older, with a $2,000 limit for those under 60.
Non-taxable Social Security benefits: Social Security benefits remained non-taxable in Delaware for the 2020 tax year.

Required Delaware Tax Forms and Schedules

Choosing the proper forms is essential to completing your Delaware tax return accurately. Using the wrong form can cause processing delays, incorrect calculations, and potential penalties.

You can check all the forms on the state’s website under Personal Income Tax Forms.

Main Individual Income Tax Forms

Form 200-01: This is the Delaware Resident Individual Income Tax Return. You should use it if you were a full-year or part-year resident choosing to file as a resident.
Form 200-02: This is the Delaware Non-Resident Individual Income Tax Return. It applies to non-residents or part-year residents choosing to file as non-residents.
Form 200-EX: This is the Application for Automatic Extension of Time to File. It allows you an extra six months to file your return but does not extend your payment deadline.

Common Schedules and Credits

Delaware Schedule A: Used for reporting itemized deductions and is now required if you itemize on your state return.
Schedule I: Used to claim credit for taxes paid to other states.
Schedule II: Used to claim the Delaware Earned Income Tax Credit.
Form 700: The Delaware Income Tax Credit Schedule reports various credits.
Form 200-01X: Used to amend a Delaware resident return after filing.
Form 329: Used for lump sum distribution calculations for certain pension distributions.
Form DE2210: Used for reporting underpayment of estimated taxes by individuals.

Small Business Forms

Form 1100S: Required for S corporations to report income in Delaware.
Schedule A-1: Used by S corporations to report shareholder information.

Step-by-Step Guide to Filing Your Delaware Tax Return

An organized process will help you accurately prepare your Delaware tax return and reduce the risk of mistakes.

Step 1 – Gather Required Documents

Collect all necessary paperwork before you start. This includes W-2 forms from your employer, 1099 forms for additional income, records of any deductions, your completed federal tax return, your Social Security number, and bank account details if you plan to receive a refund through direct deposit.

Step 2 – Complete Your Federal Return First

Your Delaware return relies on information from your federal return. Completing your federal Form 1040 first ensures you have accurate figures to transfer to your state forms.

Step 3 – Choose the Correct Delaware Form

Select Form 200-01 if you are a resident or part-year resident filing as a resident. Choose Form 200-02 if you are a non-resident or part-year resident filing as a non-resident.

Step 4 – Fill Out the Personal Information Section

Provide your full name, mailing address, Social Security number, and filing status. If you are married, include your spouse’s details even if filing separately.

Step 5 – Complete the Back of the Form First

For Form 200-01, start on the back of the form to calculate Delaware adjustments, adjusted gross income, and itemized deductions if applicable. This ensures you have accurate numbers when completing the front of the form.

Step 6 – Complete the Front of the Form

Use the information from the back of the form to calculate your taxable income, claim applicable credits, and determine whether you owe money or are due a refund.

Step 7 – Avoid Common Mistakes

Review your return for missing signatures, incorrect Social Security numbers, incomplete schedules, math errors, and missing attachments. These errors can slow processing or cause your return to be rejected.

Filing Options in Delaware

Delaware offers multiple ways to file your tax return, allowing individuals to choose the best method. Selecting the right option can help you complete the process more efficiently and avoid unnecessary delays.

Electronic Filing (E-file)

Filing your taxes online is the fastest and most secure method. The Delaware Taxpayer Portal allows you to complete and submit your return directly, with built-in checks to reduce errors.
E-filing enables you to receive a refund through direct deposit in as little as five days, compared to up to eight weeks for paper returns.
You can e-file on your own using approved tax software or work with a tax professional who can submit your return electronically on your behalf.

Paper Filing

Some individuals prefer to file a paper return. You can download and print Form 200-01 or Form 200-02 from the Delaware Division of Revenue website.
When filing by paper, you must complete all sections in black ink, attach all required schedules, and sign the return.
Mailing addresses vary depending on whether you owe taxes, expect a refund, or have a zero balance. To prevent delays, ensure you send your return to the correct address listed in the instructions.

Payment Methods and Extensions

Paying any taxes you owe on time is just as important as filing your return. Delaware provides several convenient ways to make payments, whether you choose to pay taxes online or by mail.

Online Payments

You can make payments through the Delaware Taxpayer Portal using a credit or debit card. Accepted cards include American Express, Discover, MasterCard, and VISA. A convenience fee may apply, and payment amounts are limited to $10,000.
Direct debit (ACH) from a U.S. financial institution is also available. This method has no dollar limit or additional fee, and you can schedule the payment to be withdrawn on a future date before the due date.

Paper Check Payments

Pay by check, made payable to the Delaware Division of Revenue, and write your Social Security number and the tax year on the check.
Include any required payment voucher and mail it to the address designated for returns with payment.

Extension Payments

If you file Form 200-EX for an extension, you must still pay any taxes owed by April 30, 2021. An extension only gives you more time to file your return, not more time to pay.

Estimated Tax Payments

If you expect to owe $800 or more in state taxes for the next year, you may need to make quarterly estimated payments. These can be made online or with Form 200-ES by mail.

Tracking Refunds and Confirming Payments

After filing your Delaware tax return, you may want to check the refund status or confirm that a payment was received. Delaware provides tools and resources to help you access this information quickly.

Checking Refund Status

You can track your refund online by visiting the Delaware Taxpayer Portal and selecting the option to check refund status. To access this information, you will need your Social Security number and the exact refund amount.
Refunds from e-filed returns are usually issued within five days if there are no errors or additional documentation requests. Paper returns may take up to eight weeks to process.

Confirming Payments

If you pay taxes online, you will receive a confirmation number immediately. Keep this number for your records in case you need to verify payment later.
For paper checks, you can contact the Delaware Division of Revenue to confirm receipt approximately two to three weeks after mailing your payment.

Final Filing Checklist

Before you submit your Delaware tax return, it is important to review your documents carefully. A final review can help you find and correct errors, ensure all required information is included, and avoid delays in processing your return or refund.

Make sure your federal tax return is complete. Your state return depends on information from your federal return, so it must be accurate.
Confirm that you have selected the correct Delaware form—Form 200-01 for residents or Form 200-02 for non-residents.
Review every section of your return to ensure all personal information, income figures, and deductions are correct and match your records.
Double-check all calculations to prevent math errors that could change your refund amount or cause you to owe more than expected.
Sign and date your return. If you are filing jointly, both you and your spouse must sign.
Attach all required W-2 forms, schedules, and supporting documents for any credits or deductions you claim.
Keep a complete copy of your return and all attachments for your records in case you need to access them in the future.
If you owe taxes, include your payment and make sure it is sent to the correct address or submitted online through the Delaware Taxpayer Portal.
If mailing your return, verify that you use the correct address for returns with payment, refunds, or zero balance filings.

Frequently Asked Questions

What if I missed the deadline to file my Delaware tax return?

If you missed the deadline to file your Delaware tax return, you should prepare and submit it as soon as possible. Filing late can cause you to owe additional taxes, penalties, and interest. Even if you cannot pay in full, filing quickly and paying what you can is better. You can visit the Delaware Taxpayer Portal to access the correct forms and payment options.

How can I check my refund status for the 2020 tax year?

You can check your refund status for a Delaware tax return by visiting the Delaware Taxpayer Portal and selecting the refund status page. You will need your Social Security number and exact refund amount to access your information. This process works for both e-filed and paper returns. Refunds from taxes online are usually faster, while mailed returns can take longer to complete.

Can I file my Delaware taxes online for free?

Individuals can file their Delaware taxes online for free through the Delaware Taxpayer Portal. The system allows you to complete the return, review it for errors, and submit it directly. Filing online also provides faster refund processing and secure payment options. You can use your Social Security number to access your account, upload schedules, and find forms needed for your filing.

What documents do I need to prepare my tax return?

When you prepare your Delaware tax return, gather your W-2 from each employer, any 1099 forms, your completed federal return from the IRS, and documentation for deductions or credits. You will also need your Social Security number, bank account details from your financial institution for direct deposit, and any schedules required by Delaware. Having everything ready will make the process faster and reduce errors.

How do I pay if I owe taxes to Delaware?

If you owe taxes to Delaware, you can pay through the Delaware Taxpayer Portal using a credit card, debit card, or direct debit from a U.S. financial institution. You may also mail a check with your completed payment voucher and forms. Making payments online is faster and allows you to access confirmation directly. Always meet the due date to avoid extra charges.

How can I contact Delaware about questions on my return?

You can contact the Delaware Division of Revenue by visiting their website for phone numbers and office locations. Their representatives can answer questions about your return, help you find the right forms, and assist with correcting errors. You can send inquiries through the secure online portal, which allows you to attach documents and schedules directly for review.