How to File Your Delaware Tax Return for 2015

Filling out your Delaware tax return for the 2015 tax year may seem daunting, but understanding the process and what forms and information you'll need can make it smoother and more straightforward. Whether you're an individual taxpayer or a small business owner, filing your return on time is essential to avoid penalties and ensure you receive any refunds you're entitled to.

This guide will show you the most essential things you need to do to file your 2015 Delaware tax return. We will cover who has to file, what forms they need, when they must be filed, and how they can be paid. We'll also tell you how to check your refund status and advise you on avoiding making common mistakes when you file.

Overview of Delaware State Income Tax for 2015 

Filing your Delaware state income tax return for 2015 requires understanding the state's tax system and who must file. Delaware imposes personal income tax on all residents, part-year residents, and non-residents earning income from Delaware sources. Let’s break down the key components of Delaware's income tax system and what you need to know.

Who Needs to File

The first step in filing your Delaware tax return is determining whether you must file. Delaware residents, part-year residents, and non-residents with income sourced from Delaware must file a return.

• Resident Taxpayers: If you are domiciled in Delaware or have a permanent place of abode in Delaware and spend more than 183 days there, you are considered a resident for tax purposes. As a full-year resident, you must file a Delaware tax return if your adjusted gross income (AGI) exceeds the following thresholds:
  
  • Under 60 years: $9,400 (Single/Head of Household) | $15,450 (Married/Civil Union Filing Joint)
  • 60 to 64 years: $12,200 (Single/Head of Household) | $17,950 (Married/Civil Union Filing Joint)
  • 65 and over OR blind: $14,700 (Single/Head of Household) | $20,450 (Married/Civil Union Filing Joint)
  • 65 and over AND blind: $17,200 (Single/Head of Household) | $22,950 (Married/Civil Union Filing Joint)
• Part-Year Residents: If you were a Delaware resident for part of the year, you must file if you had income from Delaware sources during that time or if you had income while residing in Delaware. Part-year residents can file as either a resident or non-resident, depending on which option is more beneficial.
• Non-Residents: If you do not live in Delaware but earned income from Delaware sources, you must file a Delaware tax return. Non-residents must report only the income they earned while in Delaware.

Key Changes for the 2015 Tax Year

Delaware made several significant changes to the tax code for the 2015 tax year. These changes could affect your filing and tax liability, so it’s essential to be aware of them:

• Higher Tax Rate for Higher Incomes: The tax rate on income exceeding $60,000 increased to 6.6%.
• Earned Income Tax Credit: Delaware offers a non-refundable Earned Income Tax Credit (EITC) for those who qualify, limited to 20% of the federal EITC. If you are eligible, you must complete Delaware Schedule II to claim this credit.
• New Contribution Checkoff: A new option was added for Delaware residents to contribute to the Protecting Delaware’s Children Fund when filing their tax return.
• Tax Credit for Taxes Paid to Other States: If you paid income taxes to another state, you may be eligible for a credit to reduce your Delaware tax liability. This requires completing Schedule I and submitting the relevant state tax returns.

Delaware’s Personal Income Tax Rates

Delaware uses a progressive income tax system, meaning the tax rate increases as income grows. For 2015, the rates ranged from 2.2% to 6.6%, depending on income. Understanding these rates can help you anticipate your tax liability and plan accordingly.

In addition to personal income taxes, Delaware also has Medicare taxes and Social Security contributions that may apply to your total income. Your employer withholds these taxes, which you must include in your filing.

Tax Year 2015 Overview

The 2015 tax year requires you to report all income earned from January 1 to December 31, 2015. It’s essential to ensure you include all relevant income from employment, self-employment, and other sources, as failing to report earnings can lead to penalties or an underpayment of taxes.

By understanding these key aspects of Delaware's income tax system, you will be better prepared to complete your tax return correctly. Now that you know who is required to file and the tax rate structure for 2015, let's move on to the next step: understanding the specific forms you’ll need to file your Delaware tax return.

What Forms Do You Need to File Your Delaware Tax Return?

You must use the correct forms when filing your Delaware tax return for the 2015 tax year. Delaware offers different forms for individual taxpayers, small business owners, and non-residents, so knowing which applies to your situation is the first step. Below, we’ll review the key forms and schedules you’ll need, depending on your filing status.

Forms for Individual Taxpayers

Delaware requires different forms based on your residency status and income type. Here are the primary forms you’ll need:

• Form 200-01: Delaware Resident Individual Income Tax Return
  This form is for full- or part-year residents who elect to file as residents. It reports your income, deductions, credits, and tax liability.
  
  • Who needs this: Full-year and part-year residents electing to file as residents.
• Form 200-02: Delaware Non-Resident Individual Income Tax Return
  This form is for non-residents and part-year residents who file as non-residents. It reports income earned from Delaware sources, such as wages, rental, or business income.
  
  • Who needs this: Non-residents and part-year residents electing to file as non-residents.
• DE Schedule I: Credit for Taxes Paid to Another State
  If you paid income taxes to another state, you may be eligible for a credit to avoid double taxation. This form requires you to submit a copy of the other state’s tax return.
  
  • Who needs this form? Anyone claiming a credit for taxes paid to another state.
• DE Schedule II: Earned Income Tax Credit
  Delaware offers a non-refundable Earned Income Tax Credit (EITC) for eligible taxpayers, equal to 20% of the federal EITC.
  
  • Who needs this: Taxpayers claiming the Delaware Earned Income Tax Credit.
• DE Schedule III: Contributions to Special Funds
  This schedule allows you to donate to specific Delaware funds, such as the Protecting Delaware’s Children Fund.
  
  • Who needs this: Taxpayers making voluntary contributions to Delaware special funds.
• Form 1027: Application for Automatic Extension
  If you need more time to file your return, use this form to request a six-month extension. Remember, this is only an extension for filing, not for paying any taxes owed.
  
  • Who needs this: Anyone filing for an extension to submit their tax return.

Small Business Tax Forms

If you’re a small business owner, you may need to file additional forms based on your business structure. Here’s a breakdown of the key forms:

• Form 300: Delaware Partnership Return
  This form reports business income, deductions, and credits for partnerships or LLCs taxed as partnerships.
• Form 1100S: S Corporation Reconciliation and Shareholders Information Return
  If your business is an S Corporation, use this form to reconcile income and provide information about your shareholders.
• Form 1100P: Declaration of Estimated Tax for S Corporations
  S Corporations with non-resident shareholders must use this form to make estimated tax payments on behalf of those shareholders.
• Schedule A-1: Shareholder’s Share of Income, Deductions, and Credits
  Complete this schedule so that each shareholder in an S Corporation can report their proportionate share of income and credits.

Where to Get Forms

All the necessary Delaware tax forms are available for download or can be obtained in person. You can access them through:

• Delaware Division of Revenue Website: Visit revenue.delaware.gov to download forms.
• Delaware Division of Revenue Offices: To pick up paper forms, visit one of their offices in Wilmington, Dover, or Georgetown.
• By Phone: Call the Division of Revenue at (302) 577-8200 to request forms by mail.

Additional Forms

Depending on your situation, you may need additional forms, such as:

• Form DE2210: For calculating penalties for underpayment of estimated taxes.
• Form 700: Delaware Income Tax Credit Schedule: Used for specific tax credits.
• Gross Receipts Tax Forms: Varies by business type and activity.

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

Filing your Delaware tax return for 2015 may seem complex, but breaking down the process into manageable steps can help make it easier. Whether you're filing as an individual taxpayer or as a small business owner, understanding the steps involved in completing your return is crucial for avoiding mistakes and ensuring a smooth filing process. Below, we provide a step-by-step guide to help you complete your Delaware tax return efficiently.

Before You Begin: Gather the Necessary Documents

Gather all the necessary documents and information before you start filling out your Delaware tax return. Here’s a checklist to ensure you’re ready:

• Federal Income Tax Return: A copy of your completed federal tax return (Form 1040, 1040A, or 1040EZ) is required to calculate your Delaware Adjusted Gross Income.
• W-2 Forms: These forms, provided by your employer, show the wages you earned and the federal and state taxes that were withheld.
• 1099 Forms: These forms report other income you received, such as interest, dividends, or self-employment income.
• Estimated Tax Payments: If you made estimated payments to Delaware, have the documentation ready.
• Documentation for Deductions: If you plan to claim deductions or credits (e.g., child and dependent care, state tax credits), ensure you have the necessary records.
• Last Year’s Delaware Return: A copy of your previous year’s Delaware tax return can help you with any carryovers or adjustments.

Step 1: Complete the Header Section of the Form

Start by filling out your basic information on Form 200-01 (Resident Return) or Form 200-02 (Non-Resident Return). This includes:

• Personal Information: Enter your name, address, and Social Security Number (SSN).
• Filing Status: Choose your filing status (Single, Head of Household, Married Filing Joint, etc.).
• Residency Information: If you’re a part-year resident, indicate the dates of your Delaware residency.

Step 2: Calculate Your Delaware Adjusted Gross Income (AGI)

Next, you’ll need to calculate your Delaware Adjusted Gross Income (AGI), a key figure in determining your tax liability. To do this:

1. Start with Federal AGI: Transfer the AGI from your federal tax return to Line 29 of Form 200-01 or 200-02.
2. Make Delaware Adjustments: Some types of income, such as interest on U.S. government bonds, are exempt from Delaware state tax. Enter any additions or subtractions to your federal AGI to calculate your Delaware AGI.

Follow the instructions on the form to determine any applicable deductions or credits. Standard adjustments may include:

• Exclusion of U.S. government bond interest
• State and local government interest
• Other allowable deductions specific to Delaware taxpayers
  
  

Step 3: Determine Your Deductions

You’ll need to choose between taking the standard deduction and itemizing deductions. The standard deduction for 2015 depends on your filing status and age:

• Single or Head of Household: $6,250
• Married Filing Joint: $12,500
• Married Filing Separately: $6,250 You may benefit from itemizing if your itemized deductions exceed the standard deduction. 

To do so:

1. Complete Section C of Form 200-01: Report your federal itemized deductions.
2. Make Adjustments: Some federal deductions may not apply in Delaware, so ensure you adjust as needed to comply with Delaware rules.
3. Enter Your Total Itemized Deductions: Transfer this figure to Line 43 of Form 200-01.

If you’re 65 or older, or blind, you may qualify for an additional deduction. Be sure to check if this applies to your filing status.

Step 4: Calculate Your Taxable Income and Tax Liability

Now that you have your adjusted gross income and deductions:

1. Subtract Deductions from AGI: This gives you your taxable income.
2. Apply Delaware’s Tax Rate: Use Delaware’s tax table or tax rate schedule to calculate the tax on your taxable income. The rates range from 2.2% to 6.6%, depending on your income.
3. Apply Tax Credits: If you qualify for any credits (such as the Earned Income Tax Credit or credits for taxes paid to another state), apply them here. Delaware offers a range of tax credits to reduce your overall tax liability.

Step 5: Determine Your Final Balance Due or Refund

After calculating your tax liability and applying any credits, you must subtract any payments or withholding from your total tax liability to determine whether you owe money or are due a refund.

• Balance Due: If you owe money, you can choose from several payment options, including paying online, by check, or via credit card.
• Refund: If you overpaid, you’ll receive a refund. You can have it directly deposited into your bank account for quicker processing.

Step 6: For Small Business Owners – Complete Business Forms

If you own a small business, you'll need to file additional forms for your business activities:

1. Form 300 for Partnerships: Report business income, deductions, and credits.
2. Form 1100S for S Corporations: Reconcile your income and provide information about your shareholders, including their share of income, deductions, and credits.
3. Form 1100P for Estimated Tax: S Corporations with non-resident shareholders must make estimated tax payments on behalf of those shareholders. These payments must be calculated and submitted according to Delaware law.

Complete the appropriate forms for your business type and file them with your tax return.

Filing Deadlines and Extensions

When filing your Delaware tax return for the 2015 tax year, adhering to the deadlines is crucial to avoid penalties and interest. We’ll review the main filing deadlines, how to ask for an extension, and what to do if you miss one.

Key Filing Deadlines for 2015 Tax Year

• May 2, 2016: This is the deadline for filing your Delaware tax return and paying any taxes due. If you fail to file by this date and owe taxes, you will incur penalties and interest. Filing your return by this date is essential to avoid these additional costs.
• May 2, 2016: If you cannot complete your return by the filing deadline, you can apply for an automatic six-month extension to file your return by submitting Form 1027: Application for Automatic Extension. However, remember that an extension to the filing does not extend the time to pay any taxes owed. You must still pay any taxes due by May 2, 2016, to avoid penalties for late payment.
• October 17, 2016: If you’ve been granted an extension, the following day is the final deadline for submitting your Delaware tax return. To avoid penalties for late filing, ensure that all required forms and schedules are completed and filed by this date.

Late Filing and Payment Penalties

Failing to file or pay your taxes on time can result in the following penalties:

• Late Filing Penalty: If you do not file your Delaware tax return by the due date, a penalty of 5% per month on the balance due, up to 50% of the amount owed, may apply.
• Late Payment Penalty: If you owe taxes and do not pay by the May 2 deadline, you’ll face a penalty of 1% per month on the balance due, up to 25% of the amount owed.
• Interest: In addition to penalties, interest will accrue on any unpaid taxes at a rate of ½% per month, starting from the original due date until the balance is paid in full.

Requesting an Extension

If you cannot complete your return by the filing deadline, you can request a six-month extension using Form 1027. Here’s how to proceed:

1. File Form 1027 by the May 2 deadline. This form can be filed online or mailed to the Delaware Division of Revenue.
2. Pay Any Taxes Due: While the extension gives you more time to file, it does not extend the time to pay any taxes you owe. Estimate and pay the taxes due by May 2, 2016, to avoid late payment penalties.

Remember, the extension only applies to filing your return—it does not extend the time to pay your taxes. You'll still face interest and penalties if you don’t pay on time.

Payment Options for Your Delaware Tax Return

When filing your Delaware tax return for 2015, it's worth considering your payment options. Delaware offers several ways to pay any taxes due, whether you’re filing online or using paper forms. Below, we break down the available payment methods and how to avoid penalties and interest by making timely payments.

How to Pay Your Delaware Tax

You have several payment options for paying your Delaware tax liability. Whether you’re submitting a personal income tax return or a business tax return, here are the most convenient and secure methods:

• Online Payment: Delaware's online system is the fastest and most convenient way to file taxes and make payments. You can e-file your return and pay any balance due electronically by visiting the Delaware Division of Revenue website. This method also lets you track your payment and refund status and ensure your payment is processed quickly, often within 24 hours.
  
  • Medicare tax and other withholding amounts are included automatically if you are an employee, but the system allows you to check for accuracy when making payments.
• Credit Card: You can also pay your taxes using a credit card, including American Express, Discover, MasterCard, or VISA. However, there’s a limit on the amount you can pay via credit card: up to $2,500. This method is a good option if you want to earn rewards points or need a short-term payment solution.
• Direct Debit (ACH): Delaware allows you to pay via ACH (Automated Clearing House) transfer for those who prefer direct bank transfers. This method has no dollar limit and is a secure way to pay taxes directly from your U.S. bank account. ACH is also ideal to avoid the high processing fees associated with credit card payments.
• Check or Money Order: If you prefer traditional methods, you can pay by check or money order. Make checks payable to "Delaware Division of Revenue" and include your Social Security number (SSN) or Employer Identification Number (EIN) along with “2015 Form 200-01” to ensure proper crediting to your account.

Payment Deadlines

Preparing and paying your tax liability by the filing deadline, May 2, 2016, is essential to avoid additional penalties. Even if you e-file for an extension to submit your tax return, you must still pay the taxes owed by the original deadline to avoid interest on the unpaid balance. Here's what you need to know:

• Filing Deadline: Your tax return and any payment of taxes owed must be submitted by May 2, 2016. Failure to file or pay by this date results in penalties and interest.
• Late Payment Penalty: If you miss the May 2 deadline, you will face a late payment penalty of 1% per month, up to 25% of the total balance owed. Interest will also accrue at ½% % per month from the due date until the balance is fully paid.

Understanding Withholding and Estimated Tax Payments

If you are self-employed or do not have sufficient withholding from your employer, you may need to make estimated tax payments throughout the year to avoid a large balance due when filing your income tax return. If you’re unsure about your estimated tax obligations, consider speaking with a tax professional or referring to Delaware’s resources for calculating estimated payments.

Frequently Asked Questions (FAQs)

What should I do if I miss the Delaware tax filing deadline?

If you miss the May 2, 2016 filing deadline, file your return as soon as possible to minimize penalties and interest. Late-filed returns with a balance due are subject to penalties of up to 5% per month. If you're due a refund, there’s no penalty for late filing, but you must file within three years to claim it. Note that paying promptly helps avoid further interest.

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

Delaware offers free electronic filing options through the Government Information Center (GIC) website. This service allows you to file your individual and business tax returns online. By e-filing, you can process your return faster and receive your refund quickly. Use the official Delaware site to file your return securely and accurately.

What exemptions can I claim on my Delaware tax return?

Delaware offers several exemptions for taxpayers. Common exemptions include those for dependents, and there are additional exemptions for taxpayers 65 or older or those who are blind. If eligible, you can reduce your taxable income by claiming these exemptions. Review all relevant tax information when preparing your return to claim any applicable exemption.

How do I contact the IRS for help with my Delaware taxes?

If you have questions about how Delaware taxes interact with federal taxes, contact the IRS for assistance. For inquiries about federal returns or tax credits like the Earned Income Credit, visit the IRS website for taxes online or call their toll-free number. However, contacting the Delaware Division of Revenue is best for questions about your Delaware tax return.

Where can I find the Delaware state seal and other official tax forms?

All official state documents include the State Seal of Delaware, including tax forms and instructions. You can access the full range of tax forms for Delaware by visiting the Delaware Division of Revenue website or contacting the Government Information Center (GIC) for help. All forms are free online; you can download them directly from the official website.