Step-by-Step Guide on How to File Your Delaware Tax Return for 2021

Filing your 2021 Delaware state income tax return can feel overwhelming, especially if you're unsure which forms to use or how the process differs from the federal return. Delaware has rules, deadlines, and filing requirements that taxpayers must follow to stay compliant. Whether you lived in the state for all of 2021 or earned income there temporarily, understanding your responsibilities is the first step toward filing accurately.

This guide is designed for Delaware residents, part-year residents, and non-residents who have Delaware-source income. It’s also helpful for sole proprietors and small business owners navigating their state income taxes. Throughout this article, you'll find step-by-step instructions, explanations of common tax forms, deadlines for the 2021 tax year, guidance on deductions and credits, and tips for tracking refunds or making payments to the Delaware Division of Revenue.

Filing your return completely and on time helps you avoid penalties and interest while ensuring you receive any refund you’re owed. We’ll also show you how to access official tax forms, file electronically or by mail, and use online tools to review your return status. Whether preparing taxes independently or reviewing them with a preparer, this resource will help you confidently complete the process.

Who Needs to File a Delaware Tax Return for 2021

Delaware law requires individuals to file a tax return if they live in the state, earn income from Delaware sources, or have Delaware tax withheld. Whether you're a full-time resident or only worked briefly in Delaware, your filing obligation depends on your residency status and income type.

Delaware Residency Classifications

Your filing requirements depend on how you were classified during the 2021 tax year:

• Resident: You lived in Delaware for a year or maintained a permanent home there.
  
  
• Part-Year Resident: You moved into or out of Delaware during 2021.
  
  
• Non-Resident: You lived in another state but earned income from Delaware sources (such as wages, self-employment, or rental property).

When You Must File a Delaware Income Tax Return

You must file a Delaware income tax return if any of the following conditions apply:

1. You were a Delaware resident with income from any source. Delaware taxes all income earned while you are a legal resident, regardless of where it was earned.
   
   
2. You were a non-resident who earned Delaware-source income. This includes wages, self-employment income, rental income, or any business activity conducted in Delaware.
   
   
3. You were a part-year resident who earned income while living in Delaware. You must report and apportion income accordingly using the proper forms.
   
   
4. Delaware income tax was withheld from your pay or other payments. Even if your total income was low, you must file to claim a refund of the withheld amount.

Everyday Situations That Require Filing

• Retirees: If you received pension income or part-time wages while living in Delaware, you may need to file, even if your Social Security is exempt.
  
  
• Remote Workers or Contractors: If you worked for a Delaware employer remotely or performed services in the state, filing is required.
  
  
• Out-of-State Employees: Individuals who commute to Delaware for work must file a non-resident return.
  
  
• Small Business Owners: If you operated a business or earned self-employment income from within Delaware, you must report that income.

2021 Filing Deadlines and Extension Options

The schedule for filing taxes in Delaware in 2021 was different from the schedule for filing taxes in the United States. You must know these dates to avoid late fees, interest, or missed chances to file for an extension.

Delaware’s 2021 Filing Deadlines

Because of changes made by the federal government, the Delaware Division of Revenue changed its usual deadlines for the 2021 tax year:

• Original state deadline: April 30, 2021
  
  
• Extended deadline: May 17, 2021 (aligned with the IRS extension due to COVID-19)
  
  
• Payment deadline: Also extended to May 17, 2021

Note: While federal returns are typically due April 15, Delaware’s standard deadline is April 30. In 2021, both were automatically extended to May 17.

You can confirm current or past due dates on the Delaware Division of Revenue's tax filing deadlines page, which is regularly updated with changes to state tax policies and requirements.

Late Filing and Payment Penalties

Delaware charges penalties and interest if you miss deadlines:

• Late filing: 5% per month of the unpaid tax, up to 50%
  
  
• Late payment: 1% interest per month until paid
  
  
• Interest on unpaid balances: 0.5% per month

Filing your return, even if you can’t pay immediately, can help you avoid larger penalties. If you expect to owe taxes, visiting the Delaware Taxpayer Portal and making a partial payment is better than delaying filing altogether.

How to File for an Extension

If you were unable to file your Delaware return by May 17, 2021, you could request more time by submitting Form PIT-EXT:

• Filing extension deadline: May 17, 2021
  
  
• Extended return due date: October 15, 2021
  
  
• An extension only gives you more time to file, not more time to pay

Form PIT-EXT is downloaded from the Delaware Division of Revenue’s official website. To complete the form, you’ll need basic information and access to a computer or device that allows you to fill it out and submit it by mail or electronically. Delaware’s taxation system does not automatically recognize a federal extension. You must submit a separate PIT-EXT form to extend your state return deadline.

Delaware State Tax Rates and Exemptions for 2021

Delaware uses a progressive income tax system, meaning higher income levels are taxed at higher rates. For the 2021 tax year, the state applied rates ranging from 2.2% to 6.6%, depending on your taxable income. Income under $60,000 was taxed at graduated lower rates, while income over $60,000 was taxed at the maximum rate of 6.6%.

Your tax liability is based on your federal adjusted gross income, with adjustments specific to Delaware law. Calculating your state income tax correctly is essential to avoid underpayment or overpayment, especially if you claim exemptions or credits.

Use the Correct Tax Forms to Apply Exemptions

Several key exemptions can help reduce your total tax owed, but you must use the proper tax forms to claim them. These exemptions include:

• Social Security benefits are entirely exempt from Delaware taxation.
  
  
• Railroad Retirement benefits are also not taxed by the state.
  
  
• The pension income exclusion allows taxpayers age 60 and older to exclude up to $12,500 of eligible pension or retirement income.
  
  
• Volunteer firefighter credit was increased to $500 for the 2021 tax year.

To claim these benefits, review the instructions on the 2021 Delaware tax forms and complete any supporting schedules as required. By using exemptions correctly, these papers will help you lower your taxable income.

Which Delaware Tax Forms to Use

Choosing the correct tax form is essential to ensure your Delaware state return is accurate and complete. The forms you need depend on your residency status, income type, and whether you are claiming specific deductions or credits.

If you were a Delaware resident for all of 2021, you’ll use Form 200-01, the Delaware Individual Resident Income Tax Return. You must file Form 200-02, the Delaware Individual Non-Resident Return, if you obtained your income from Delaware sources but lived outside the state. Part-year residents generally use Form 200-02 and apportion income earned in Delaware.

Standard Schedules and Supplementary Forms

Depending on your tax situation, you may also need to include extra schedules or forms to fill out your return correctly. These documents give specific information about your deductions, types of income, or changes to your tax return:

• If you are itemizing deductions instead of taking the standard deduction, Schedule A should be included. This form helps you list qualified expenses such as medical costs, mortgage interest, or charitable contributions.
  
  
• Schedule B is required if you earned interest or dividend income during the year. This includes income from bank accounts, investment dividends, or bond interest.
  
  
• Schedule D must be filed if you had capital gains or losses, such as from the sale of stocks, mutual funds, or other investments.
  
  
• Form PIT-EXT is used to request a filing extension. It gives you more time to submit your return, yet does not extend the deadline to pay any taxes owed.
  
  
• Form PIT-EST should be included if you made estimated tax payments during 2021. This helps ensure those payments are credited adequately toward your total tax liability.

Each form plays a key role in ensuring your return reflects your financial picture. Be sure to review the instructions for each form to determine whether it applies to you. To access official 2021 forms and instructions, you can download them directly from the Delaware Division of Revenue’s website. For secure e-filing, visit the Delaware Taxpayer Portal, where you can file, check your account, and make payments online.

Step-by-Step Instructions to Complete Your Delaware Return

Filing your 2021 income tax return for Delaware requires careful preparation, accurate data entry, and proper use of supporting documents. Follow these detailed steps to ensure your return is complete and ready for submission.

Gather Your Documents

Before beginning, collect all relevant forms and records. Having these materials on hand will help you complete your return efficiently and reduce the chance of errors:

• W-2 forms from each employer who paid you wages during 2021. These show how much you earned and how much tax was withheld.
  
  
• One thousand ninety-nine forms report income from interest, dividends, retirement distributions, or self-employment. These forms report additional income that is not included on a W-2.
  
  
• A copy of your federal Form 1040 provides your adjusted gross income and forms the basis for your Delaware return.
  
  
• Proof of any estimated tax payments made to the Delaware Division of Revenue during 2021. You’ll need this to receive proper credit for prepayments.
  
  
• Receipts or documentation for deductions and credits you plan to claim, such as charitable donations or education expenses.
  
  
• A copy of your 2020 Delaware return, which can help with carryovers or comparisons.
  
  
• You must provide Social Security cards for yourself, your spouse, and any dependents you claim. Delaware requires exact matches to verify taxpayer identity.

Check the official Delaware Division of Revenue 2021 tax forms page to make sure you are using the most updated versions of all forms.

Complete Personal and Income Information

Start by filling in your details at the top of Form 200-01 (Resident) or Form 200-02 (Non-resident):

• Enter your legal name, mailing address, and Social Security number as they appear on your identification documents.
  
  
• If filing jointly, include the same information for your spouse.
  
  
• Select your correct filing status, such as single, married filing jointly, or head of household.
  
  
• List the full names and Social Security numbers of all dependents you are claiming.
  
  
• Enter your adjusted federal gross income, as shown on your federal return.
  
  
• Make any necessary Delaware-specific adjustments to your income based on the instructions provided.

Accurate personal and income information ensures your return is processed without delay or rejection.

Apply Deductions and Credits

Next, determine which deductions and credits apply to your situation:

• Choose between taking the standard deduction or itemizing your deductions using Delaware Schedule A. You may benefit from itemizing if your deductible costs exceed the standard deduction.
  
  
• Apply any qualifying credits, such as the Volunteer Firefighter Credit, which reduces the amount of tax you owe directly.

Follow the form instructions carefully to calculate these figures correctly. Misapplying deductions or credits is one of the most common filing errors.

Calculate Tax and Determine Refund or Balance Due

Use the 2021 Delaware income tax tables or rate schedule to calculate the amount of tax you owe:

• Start with your adjusted taxable income after deductions.
  
  
• Refer to the updated tax tables to determine your basic tax based on your income level.
  
  
• Subtract any Delaware tax withholdings reported on your W-2s and 1099s.
  
  
• Apply any estimated tax payments made throughout the year.
  
  
• You are owed a refund if your total payments and credits exceed your calculated tax.
  
  
• If your tax exceeds your payments, the remaining amount is your balance due.

Always double-check your math and compare your total payments against your calculated liability to avoid penalties or delays in refund processing.

Common Filing Mistakes to Avoid

Filing your Delaware income tax return accurately is as important as meeting the deadline. Small mistakes can delay your refund, cause processing errors, or lead to penalties. Here are some of Delaware taxpayers' most frequent errors and how to avoid them.

• Using the wrong tax form: Choosing between Form 200-01 (resident) and Form 200-02 (non-resident) depends on your legal residency status during the 2021 tax year. Filing the incorrect form may result in a notice from the Delaware Division of Revenue and a request to amend your return.
  
  
• Omitting Social Security numbers: Each taxpayer and dependent listed on your return must have a valid Social Security number. Missing or incorrect numbers can delay processing or the denial of your exemptions and credits.
  
  
• Making math or calculation errors: Even minor mistakes in totaling income, subtracting deductions, or applying credits can lead to an incorrect tax balance. Carefully review your figures, especially when completing calculations by hand or entering information into tax software.
  
  
• Forgetting to sign and date the return: An unsigned return is considered incomplete and will not be processed. If you are filing jointly, both spouses must sign the return before submitting it by mail or electronically.
  
  
• Failing to include required documentation: If filing by paper, supporting documents, such as W-2s, 1099s, or additional schedules, must be included with your return. Forgetting these may result in delays or correspondence from the state.

Avoiding these mistakes speeds up your refund and helps ensure your tax filing record remains accurate and current with the Delaware Division of Revenue.

How to File Your Return: E-File vs. Paper Filing

Delaware taxpayers can file their 2021 income tax return in two main ways: electronically (e-filing) or by mailing in a paper return. Each method has pros and cons, but e-filing is usually the fastest and safest choice.

Why E-Filing Is Recommended

Filing electronically through the Delaware Taxpayer Portal offers several benefits. E-filed returns are typically processed within two to three weeks, significantly faster than paper returns. The system checks for common errors before submission and confirms once your return is accepted. E-filing is available to all Delaware taxpayers, regardless of income level, and it’s free to use through the state portal.

If you e-file, you’ll receive quicker confirmation and can easily track your refund using online tools. To access the portal and begin your return, visit tax.delaware.gov.

When to Use Paper Filing

You may file a paper return if you prefer mailing documents or cannot use a computer. If so, be sure to use the correct mailing address:

• Returns with payments: P.O. Box 508, Wilmington, DE 19899-0508
  
  
• Returns expecting a refund: P.O. Box 8710, Wilmington, DE 19899-8710
  
  
• Returns with no balance due: P.O. Box 8711, Wilmington, DE 19899-8711

Double-check that your return is signed, dated, and includes all necessary schedules and attachments.

How to Make a Tax Payment or Track a Refund

After completing your return, you’ll owe a balance or be eligible for a refund. Delaware offers several secure options for making a payment and provides online tools to help you monitor the status of your refund.

Payment Options

If you owe taxes for 2021, Delaware accepts the following payment methods:

• Online payments allow you to pay using a bank account (ACH), debit card, or credit card. This is the fastest and most secure option, providing immediate confirmation once processed.
  
  
• Checks or money orders can be mailed to the Delaware Division of Revenue. To ensure your payment is credited correctly, include your name, Social Security number, and the tax year.
  
  
• Phone payments are available through Delaware’s automated system. Follow the prompts to submit your payment by card.

To avoid penalties, you must pay at least 90% of your total tax bill by the original due date. The full amount was due by May 17, 2021, for the tax year 2021. After that date, any unpaid balance will start to accrue interest and late fees.

Refund Timelines

Refund processing depends on how you file:

• Returns filed electronically are usually processed within 2 to 3 weeks.
  
  
• Paper returns may take 6 to 8 weeks to process.
  
  
• If your return requires additional review, allow another 2 to 4 weeks.

How to Check Refund Status

Delaware offers an online refund tracking system. To check your status, you’ll need your Social Security number and the refund amount shown on your return. The system typically updates every 24 to 48 hours. If there is a significant delay, you can contact the Delaware Division of Revenue for further assistance.

Final Filing Checklist

Before submitting your 2021 Delaware income tax return, review the checklist below. Completing these final steps can help prevent delays, reduce errors, and ensure your return is accepted the first time.

• Make sure that your return is finished. Check that all the required fields are filled out and that the math is correct.
  
  
• If you mail your taxes, include all the W-2s and 1099s you need. These documents back up the income and withholdings you reported.
  
  
• Include all applicable schedules and credit forms. This may include Schedule A for deductions or Schedule D for capital gains.
  
  
• Sign and date your return. If you are married and filing jointly, both spouses must sign.
  
  
• Verify your mailing address if filing by paper. Use the correct address based on whether you owe tax, expect a refund, or have a zero balance.
  
  
• Choose and arrange your payment method if you have a balance due.
  
  
• Keep copies of your return and all supporting documents for at least three years. You may need them for reference or in case of an audit.

Reviewing your return carefully ensures accuracy and helps you avoid common filing issues.

FAQs About the 2021 Delaware Tax Return

What if I missed the 2021 Delaware filing deadline?

If you cannot meet the May 17, 2021, deadline, file your return as soon as possible to minimize penalties and interest. Delaware charges 5% monthly for late filing and 1% for late payments. Filing late is better than not filing at all, especially if you are due a refund.

What deductions do Delaware taxpayers often overlook?

Commonly missed deductions include the pension income exclusion (up to $12,500 for those age 60 or older), the Volunteer Firefighter Credit ($500 for 2021), and tax credits paid to other states. Some taxpayers also overlook charitable contributions if they itemize using Schedule A. Always review the instructions to see what applies to your return.

How do I file a Delaware extension for 2021?

To file an extension, you must submit Form PIT-EXT by the original due date, May 17, 2021. This gives you until October 15, 2021, to file your return. However, it does not extend the time to pay. You must pay at least 90% of your estimated tax by the original deadline to avoid penalties.

Are Social Security and Railroad Retirement benefits taxable in Delaware?

No. Delaware does not tax Social Security income or Railroad Retirement benefits, even if they are partially taxed at the federal level. These exemptions are automatic, so you do not need to submit a special form to claim them; just exclude these amounts from your Delaware taxable income.

What if I file the wrong form (resident vs. non-resident)?

If you file the wrong form, such as submitting a resident return as a non-resident, the Delaware Division of Revenue will typically notify you by mail. You may be required to submit an amended return using Form 200-01-X or 200-02-X, depending on your corrected residency status. Respond promptly to avoid delays in processing or penalties.