Delaware Tax Relief: Payment Plans, Liens & Levies

Owe Delaware state taxes or received a notice from the Delaware Division of Revenue (DOR)? Do not guess your next move. Delaware has no state or local sales tax and imposes 20-year renewable judgment liens. We review your Delaware tax balance, notice, deadline, payment options, and collection risk so you know what to do next.

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No guarantee of outcome. We will tell you if settlement is not realistic. A review by phone: (888) 260-9441

Reviewed by William McLee, Enrolled Agent

Last reviewed: June 27, 2026

Reviews content for accuracy against official sources. About our review process

Received a Notice of Proposed Assessment, tax judgment, bank levy, wage garnishment, refund offset, or franchise tax notice from Delaware? Deadlines and collection risk matter. Delaware judgment liens last 20 years and are renewable for another 20.

These are not normal bills.

Deadlines and collection risk matter.

Check My Delaware Collection Risk

Speak with a tax relief specialist: (888) 260-9441

Delaware Tax Relief Overview

Owing Delaware state taxes is different from owing the IRS. The Delaware Division of Revenue (DOR), within the Delaware Department of Finance, has its own rules, deadlines, and collection tools. Federal tax relief options like Offers in Compromise do not work the same way at the state level, so it's worth understanding Delaware's specific tax assistance options before assuming a federal strategy will apply.

Key Facts About Delaware Tax Relief

No formal Offer in Compromise program — Delaware's current official collection materials do not describe such a program. In most cases, taxpayers should focus on payment plans, appeals, penalty relief, or other collection alternatives.
No state or local sales tax — Delaware does not impose a state or local sales tax. However, businesses pay a Gross Receipts Tax (ranging from 0.0945% to 2.4218%) on the seller's gross receipts.
20-year judgment liens — Renewable for another 20 years (up to 40 years total). No property is exempt from attachment.
48-month payment plans — Available without a judgment filing if using automatic deduction (ACH). Plans over 48 months require a judgment.
Corporate franchise tax — Administered by the Secretary of State. Minimum $175–$400; maximum $200,000 ($250,000 for Large Corporate Filers). Due March 1.

Depending on your situation, you may need one or more of the following forms of Delaware tax assistance:

A payment plan to pay over time
An appeal if you received a proposed assessment you disagree with
Penalty abatement if penalties make the balance impossible to pay
Lien release or levy resolution if collection action has started
Filing help if you have unfiled Delaware tax returns

If you have a Delaware business and owe withholding tax, the stakes are higher. Withholding taxes are trust fund taxes, and Delaware imposes a 100% Trust Fund Recovery Penalty on responsible persons who willfully fail to pay over withheld taxes under 30 Del. C. Section 535(e).

Delaware Tax Relief Options at a Glance

Offer in Compromise: Delaware's official collection materials do not describe a formal offer in compromise or settlement program. Payment plans and penalty abatement are the primary alternatives for taxpayers who cannot pay a balance in full.

Option	What It Does	Best For	Key Deadline
Payment Plan	Pay balance over time via automatic deductions (ACH)	Can afford monthly payments; have a bank account for ACH	Apply when the balance is assessed
Penalty Abatement	Request waiver of penalties for reasonable cause	Penalties are large; had illness, disaster, or records loss	Submit with supporting docs
Appeal	Challenge the assessment at the Tax Appeal Board	You disagree with the amount owed and have proof	60 days (30 days for withholding)
Lien Release	Release of Notice of Judgment from the records	Balance paid or other resolution reached	DOR issues a release within 30 days of satisfaction
Levy/Garnishment Help	Respond to a bank levy or wage garnishment	Bank account frozen or wages being garnished	Act immediately—20-day hold on bank levies
Franchise Tax Help	Resolve corporate franchise tax debt with the Secretary of State	DE corporation with unpaid franchise taxes	Annual Report due March 1

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What Delaware Tax Notice Did You Receive?

Select your notice type for a quick explanation of what it means and your options.

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Not Sure Where to Start?

We can review your Delaware tax notice, balance, and deadlines — and explain your options in plain English. Call (888) 260-9441 or request a free review. We will tell you if settlement is not realistic.

Get a Delaware Tax Relief Review

No pressure. No guarantee. Just a clear review of your options.

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What the Delaware Division of Revenue Can Do to Collect

If you owe Delaware state taxes and do not address the balance, the Division of Revenue has a range of collection tools authorized under Title 30 of the Delaware Code. Not every case reaches the most serious actions, but the longer a balance goes unpaid, the more options the state may use.

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Add Penalties and Interest

Failure to file: 5% per month, max 50%. Failure to pay: 1% per month, max 25%. Interest accrues at 0.5% per month (6% annual), compounded monthly. Penalty abatement may be available for reasonable cause.

Send Collection Notices

The director must give written notice requiring payment within 10 days of an assessment becoming final. If over $1,000, notice must be sent by certified or registered mail (30 Del. C. Section 552(b)).

Offset Refunds

Delaware may intercept state tax refunds or refundable credits to repay taxpayer debts. Collection by setoff against tax refunds may occur whenever there exists an unpaid assessment of tax, interest, penalties, or additions to tax (30 Del. C. Section 553(c)).

File a Notice of Judgment

The director may file a certificate in the office of the prothonotary of any county, which becomes a judgment of record with the same force as any court judgment. The lien lasts 20 years, renewable for another 20 (30 Del. C. Section 554).

Garnish Wages and Bank Accounts

The Division may garnish wages, bank accounts, and other property after filing a Notice of Judgment. A 10-day advance notice is required. For bank levies, the bank holds funds for 20 days before remitting.

Seize and Sell Property

The director may issue a warrant to the sheriff to levy upon and sell personal or real property of a taxpayer (30 Del. C. Section 556(b)). No property is exempt from execution or attachment upon a tax judgment.

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Delaware Tax Payment Plans

If you cannot pay your Delaware state tax balance in full, a payment plan (installment agreement) may be an option. Delaware offers installment payment plans for individuals and businesses, but key conditions apply depending on the plan length and payment method.

Important: Interest, Penalties, and Offsets Continue During Payment Plans

While on an installment agreement, interest and penalties continue to accrue on the unpaid balance. Delaware will also offset any Delaware, Maryland, or federal refund to the balance due. The payment plan does not prevent refund offset.

Key Conditions for Delaware Payment Plans

Requirement	Details
Eligibility	Available for assessed tax liabilities. Plans are discretionary and based on your financial situation.
Plans up to 24 months	Standard installment payment plans available.
Plans 24–48 months	Require automatic deduction (ACH) or voluntary wage deduction to avoid a tax lien being filed.
Plans over 48 months	Require the Division of Revenue to file a judgment to protect the state's interest.
Payment Method	ACH withdrawal or voluntary wage deduction preferred for longer plans.
Financial Hardship	If you cannot pay any amount, Delaware may temporarily delay collection until your financial condition improves. During the delay, penalties and interest continue to accrue, and a Notice of Judgment will be filed.
Current Filing	All tax returns should be filed and current taxes paid on time while the plan is in effect.
Interest & Penalties	Continue to accrue on the unpaid balance during the plan.
Refund Offset	State, Maryland, and federal refunds will be captured and applied to the balance during the plan. A payment plan does not prevent refund offset.
Default Risk	Default may result in immediate collection action, including garnishment and lien enforcement.

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How to Request a Delaware Payment Plan

Contact the Delaware Division of Revenue Collections unit:

New Castle County: (302) 577-8208
Kent/Sussex Counties: 1-800-292-7826
Collections Email: DOR_Collections@delaware.gov
Installment Line: (302) 577-8586

See If a Delaware Payment Plan Makes Sense

A Delaware payment plan may help if you cannot pay in full, but approval is not automatic. The right move depends on your balance, notice status, income, assets, and whether collection has already started. We will tell you if settlement is not realistic.

See If a Delaware Payment Plan Makes Sense

No guarantee of approval. DOR makes the final decision.

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Which Delaware Tax Relief Option Fits Your Situation?

Option	Best If	Deadline	Notes
Payment Plan	You can't pay in full but can afford monthly payments via ACH or wage deduction (up to 48 months without judgment)	Apply when the balance is assessed; sooner is better	Interest continues to accrue
Penalty Abatement	Penalties make the balance unpayable, and you have reasonable cause (illness, disaster, etc)	Submit the request with supporting documentation	Based on the reasonable cause standard
Appeal	You disagree with the assessment and have evidence to support your position	60 days from proposed assessment (30 days for withholding)	Filed with the Director, then the tax appeal board
Lien/Levy Help	A judgment has been filed, or your bank account/wages are being garnished	Act immediately — garnishment requires a 10-day notice; bank levies have a 20-day hold	May require full payment or negotiation
Settlement	Delaware's official collection materials do not describe a formal settlement or an offer-in-compromise program. Payment plans and penalty abatement are the primary alternatives.	—	—

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Does Delaware Have an Offer in Compromise Program?

Delaware's current official collection materials do not describe a formal Offer in Compromise (OIC) program. This is one of the most important differences between Delaware state tax relief and federal tax relief.

Delaware's official collection materials emphasize payment arrangements, refund offsets, judgments, and enforcement tools rather than a formal tax-settlement program. If a company advertises "Delaware tax settlement" or "pennies on the dollar" for state tax debt, be skeptical, and confirm any claim directly with the Delaware Division of Revenue.

What This Means for Taxpayers

Do not assume federal OIC strategies apply to Delaware state tax debt. If you owe Delaware state taxes, your resolution options are generally limited to:

Paying in full — The simplest option if you have the funds
Payment plan — Up to 48 months via ACH without judgment; over 48 months requires judgment filing
Penalty abatement — If you have reasonable cause under 30 Del. C. Section 534
Appeal — If you dispute the assessment and act within the 60-day deadline (30 days for withholding)
Collection delay — If you cannot pay anything, Delaware may temporarily delay collection (but a judgment will be filed, and interest/penalties continue)

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Delaware Penalty Abatement

Penalty abatement is different from a payment plan. A payment plan lets you pay over time. Penalty abatement asks Delaware to reduce or remove penalties when allowed under state rules.

Penalties may be abated if the taxpayer shows "reasonable cause and not due to wilful neglect" under 30 Del. C. Sections 534(a) and 534(b).

Reasonable Cause Standard

The director of revenue is also authorized to abate unpaid assessments that are:

Excessive in amount
Assessed after the statute of limitations
Erroneously or illegally assessed
Where collection costs would not warrant collection (30 Del. C. Section 538)

Delaware Penalty Rates

Penalty Type	Rate	Maximum	Statute
Failure to File	5% per month (or fraction)	50% aggregate	30 Del. C. Section 534(a)
Failure to Pay	1% per month (or fraction)	25% aggregate	30 Del. C. Section 534(b)
Fraud	75% of the fraudulent portion	75%	30 Del. C. Section 535(a)
Underpayment of Estimated Tax	1.5% per month	No aggregate max stated	30 Del. C. Section 535(b)
Withholding — Failure to Pay	1% per month	25% aggregate	30 Del. C. Section 535(d)
Trust Fund Recovery (Willful)	100% of unpaid tax	100%	30 Del. C. Section 535(e)

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How to Request Penalty Abatement

Reasonable cause penalty abatement requests should be submitted to:

Tax Conferee, Delaware Division of Revenue, P.O. Box 8714, Wilmington, DE 19899. Email: taxconferee@delaware.gov

Delaware's official collection materials emphasize payment arrangements and enforcement rather than settlement of the underlying tax liability. Penalty reduction may be available based on hardship and prior compliance with filing requirements.

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Delaware Tax Appeals and Protests

If you disagree with a tax assessment from the Delaware Division of Revenue, you have the right to file a written protest. This is a formal process with strict deadlines. Missing the deadline can make the assessment final and much harder to challenge.

Protest Deadlines

Type of Tax	Protest Deadline	Statute
General Taxes	60 days from notice of proposed assessment	30 Del. C. Section 523
Withholding Taxes	30 days from notice	30 Del. C. Section 523
Taxpayers Outside the U.S.	120 days	30 Del. C. Section 523

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Strict Deadlines Apply. The protest deadline is 60 days for most taxes (30 days for withholding) from the date of the notice of proposed assessment. Missing this deadline can severely limit your ability to challenge the assessment. Do not wait.

How to File a Protest

Written protests should be mailed to: Division of Revenue, State of Delaware, P.O. Box 8714, Wilmington, DE 19899-8714.

After the Protest: Tax Appeal Board

The director's determination on a protest becomes final after the protest period (60 days general; 30 days withholding; 120 days if abroad) unless the taxpayer seeks review by the Delaware Tax Appeal Board under 30 Del. C. Sections 525 and 544.

The Tax Appeal Board meets monthly at the Carvel State Office Building, 820 North French Street, Wilmington, DE 19801
Meetings are open to the public
From any Tax Appeal Board decision, the taxpayer may appeal to the Superior Court within 30 days after the date of the order. The Board may extend this by an additional 30 days for good cause (30 Del. C. Section 331)
If the amount in controversy exceeds $50,000, either party may remove the appeal from the Tax Appeal Board to the Superior Court (30 Del. C. Section 333)
The Board may award damages up to $5,000 to the State if proceedings are frivolous or instituted primarily for delay (30 Del. C. Section 332)

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Review My Delaware Notice

If you received a Delaware Notice of Proposed Assessment, review the deadline before doing anything else. Missing an appeal deadline can limit your options.

Review My Delaware Notice

This is not legal advice. Consult a qualified representative for your specific situation.

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Delaware Tax Liens and Judgments

A tax judgment in Delaware is a collection tool with a long reach. When the director files a certificate with the prothonotary of any county, it becomes a judgment of record with the same force as a court judgment (30 Del. C. Section 554).

How Delaware Tax Judgments Work

Filing: The director may file a certificate with the prothonotary of any county where the taxpayer resides or owns property.
Duration: 20 years from the date of entry, renewable for another 20 years (up to 40 years total) by filing a renewal certificate before expiration (30 Del. C. Sections 554(c) and 554(d)).
No Exemptions: No property—including wages, bank deposits, real or personal property—is exempt from execution or attachment upon a tax judgment (30 Del. C. Section 554(b)).
Release: The Division will issue a release of the Notice of Judgment within 30 days after the tax debt (including interest and additions) is satisfied by payment or adjustment.
Subordination: The Director may release or subordinate the lien if the amount is sufficiently secured by other property or if release will not endanger collection (30 Del. C. Section 555).
Discharge of specific property: A taxpayer may request discharge against one property if other property is worth at least 2x the tax owed, the state receives the government's interest value, or sale proceeds are held in escrow during a dispute.

Judgment Duration

A Delaware tax judgment can remain in effect for 20 years and may be renewed for another 20 years, for a potential total of 40 years. Delaware does not provide property exemptions from tax judgment enforcement.

Collection Statute of Limitations

Tax may be collected by court proceeding within 10 years after the assessment becomes final, or before expiration of any collection period agreed upon in writing (30 Del. C. Section 553(a)). The 10 years may be extended by written agreement. The running of the collection statute is suspended during bankruptcy for the period the director is prohibited from collecting, plus 6 months thereafter (30 Del. C. Section 553(e)).

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Delaware Bank Levy / Garnishment

The Delaware Division of Revenue may garnish wages, bank accounts, and other property after filing a Notice of Judgment.

Requirements for Garnishment

Three requirements must be met before garnishment (unless collection is immediately threatened):

The tax is assessed, and Notice and Demand are sent
The taxpayer neglects or refuses to pay
A Notice of Judgment is filed at least 10 days in advance

If collection is threatened (e.g., the taxpayer leaving the country), the Division may take immediate collection action.

Bank Account Levies

For bank account levies, the bank must hold funds for 20 days before remitting to the Division, allowing the taxpayer time to resolve issues
The Director may issue a notice of garnishment to any bank to set aside and pay over any property owed to or held for the debtor, notwithstanding the general bank exemption under 10 Del. C. Section 3502 (30 Del. C. Section 556(c))
This provision allows Delaware's tax authority to reach funds that some other creditors cannot access under general bank exemption rules

Wage Garnishment

The Director may garnish wages, salaries, and other amounts due from any person (other than a bank) owing property to a judgment debtor (30 Del. C. Section 556(d)). A garnishee has 20 days to respond. Failure to comply may result in a penalty equal to the amount the garnishee was instructed to set aside.

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Wage Garnishment vs. Bank Levy

Feature	Wage Garnishment	Bank Levy
Target	Your paycheck	Your bank account
Amount	Varies — no statutory exemption for state tax levies	Full account balance (up to liability)
Duration	Continues each pay period until paid	One-time at the time of service (20-day hold)
Notice Required	10 days after judgment filed	10 days after judgment filed; 20-day bank hold

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Delaware Wage Garnishment for Tax Debt

Wage garnishment means Delaware can take money directly from your paycheck to pay your state tax debt. Delaware's wage garnishment for state tax debt is not limited by the 15% general garnishment cap that applies to non-tax creditors under 12 Del. C. Section 3502(b). The Division of Revenue has broad authority to garnish wages for tax debts.

Key Facts About Delaware Wage Garnishment

The Director may garnish wages, salaries, and other amounts due from any person owing property to a judgment debtor (30 Del. C. Section 556(d))
A garnishee (employer) has 20 days to respond to a notice of garnishment
Failure to comply may result in a penalty equal to the amount the employer was instructed to set aside
The wage garnishment remains in effect for subsequent pay periods until the total amount has been withheld and remitted
For non-tax creditors, Delaware's maximum wage garnishment is 15% of disposable income. However, this 15% limit does NOT apply to state tax levies by the Division of Revenue

If you have received a garnishment notice or an intent to garnish, do not ignore it. Once garnishment starts, the money is taken before you receive your paycheck. Contact the Delaware Division of Revenue Collections unit immediately to discuss your options.

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Get Help With a Delaware Collection Notice

If Delaware has filed a judgment, frozen a bank account, started wage garnishment, or sent a serious collection notice, waiting usually makes the problem worse. Get the notice reviewed before you make random payments or ignore the deadline.

Get Help With a Delaware Collection Notice

No guarantee of outcome. We review your facts and explain your options. We will tell you if settlement is not realistic.

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Delaware Unfiled Tax Returns

If you have not filed Delaware tax returns for one or more years, that can block most resolution options. The Division of Revenue may estimate your tax and issue assessments based on those estimates — sometimes higher than what you actually owe.

Filing accurate returns can sometimes reduce an incorrect balance. But do not rush or file bad returns. It's better to get the returns prepared correctly with the right income, deductions, and Delaware credits.

Why Filing Matters

Unfiled returns block payment plan eligibility
DOR may issue substitute returns with a higher tax than you actually owe
Penalty abatement generally requires all returns to be filed
Court collection generally must begin within 10 years after the assessment becomes final, subject to written extensions and bankruptcy tolling
Corporations that fail to pay franchise taxes for one year risk charter revocation by gubernatorial proclamation (8 Del. C. Section 511)

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Delaware Business Tax Debt: Gross Receipts Tax, Franchise Tax & Corporate Income Tax

Delaware's tax structure differs from most states. There is no general sales tax, but businesses face several distinct taxes that can create serious liability if unpaid. Understanding which tax applies to your situation is critical to finding the right tax assistance.

Delaware Gross Receipts Tax

Delaware imposes a gross receipts tax on sellers of goods (tangible or intangible) or providers of services in the state. The tax is imposed on the seller, not the consumer.

Rates: Range from 0.0945% to 1.9914%, or a variable rate on Petroleum Products as high as 2.4218%, depending on the business activity
No deductions: There are no deductions for cost of goods sold, labor costs, interest expense, discounts, delivery costs, or state/federal taxes
Exclusions: Most businesses are entitled to a gross receipts tax exclusion, which varies by business activity (generally starting at $100,000 per month and up to $1,250,000)

Delaware Corporate Franchise Tax

The Delaware corporate franchise tax is administered by the Delaware Secretary of State, Division of Corporations (not the Division of Revenue).

Franchise Tax Is Separate from Income Tax. All corporations incorporated in Delaware must file an annual franchise tax report and pay franchise tax, regardless of where they conduct business. This is for the privilege of incorporating in Delaware. Even corporations not conducting business in Delaware must pay franchise tax (though they are not subject to Delaware corporate income tax).

Item	Details
Minimum Tax	$175 (Authorized Shares method) or $400 (Assumed Par Value Capital Method)
Maximum Tax	$200,000 ($250,000 for Large Corporate Filers)
Due Date	March 1 of each year
Late Filing Penalty	$200 plus 1.5% interest per month on the unpaid balance
Estimated Payments	Required if expected liability is $5,000+: 40% due June 1, 20% Sept 1, 20% Dec 1, remainder March 1
Charter Revocation Risk	If franchise taxes are unpaid for one year, the charter may be declared void by gubernatorial proclamation (8 Del. C. Section 511)

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LLC, LP, and GP Annual Taxes

LLCs, LPs, and GPs formed in Delaware do not file an annual report but must pay an annual tax of $300, due on or before June 1st. The penalty for non-payment is $200 plus 1.5% interest per month.

Delaware Corporate Income Tax

Delaware's corporate income tax rate is 8.7% of federal taxable income allocated and apportioned to Delaware (30 Del. C. Chapter 19).

Apportionment: Starting in tax year 2020, Delaware corporate income tax apportionment for unallocated income is based only on Delaware gross receipts as a share of total U.S. gross receipts for interstate businesses.

Corporations not conducting business in Delaware are NOT subject to corporate income tax (30 Del. C. Section 1902(b)(6)), but must still pay franchise tax.

Trust Fund Recovery Penalty

100% Personal Liability for Responsible Persons. A "responsible person" includes officers, employees, directors, shareholders, partners, LLC members, or any person with authority to direct the disbursement of funds. "Willfulness" means intentional, deliberate, voluntary, and knowing conduct—not accidental. It includes using funds to keep the business going while taxes remain unpaid.

Personal Income Tax Rates (for reference)

Delaware personal income tax rates are graduated, ranging from 2.2% to 5.55% for taxable income under $60,000, and up to 6.6% for higher incomes. Standard deduction: $3,250 single / $6,500 married filing jointly. Personal exemption credit: $110 per exemption.

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Review My Delaware Business Tax Debt

Franchise tax, gross receipts tax, and trust fund recovery penalties can create serious personal liability for business owners. We review your facts and explain your options honestly.

Review My Delaware Business Tax Debt

No pressure. No guarantee. Just a clear review of your options.

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Delaware Tax Relief Tools & Resources

Use these official Delaware resources to check your balance, understand your obligations, and access forms. Then request a review if the numbers show the balance is growing or collection is already active.

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Delaware Division of Revenue

Access the official DOR website for tax forms, payment options, and account information.

Division of Revenue →

Delaware Franchise Tax Calculator

Calculate your corporation's franchise tax liability using the official Secretary of State calculator.

Franchise Tax Calculator →

Delaware Tax Forms

Find Delaware state tax forms from the official DOR website.

DOR Forms →

Delaware Tax Appeal Board

Learn about the appeal process and view upcoming meeting schedules.

Tax Appeal Board →

Division of Corporations

Access the Secretary of State's Division of Corporations for franchise tax filings and entity searches.

Division of Corporations →

Delaware Collections Contact

Direct contact information for the DOR Collections unit.

New Castle: (302) 577-8208 Kent/Sussex: 1-800-292-7826 Email: Email Collections →

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Sources Used

These are the official government sources used for this page. Always check the current official source for the most up-to-date information.

Delaware Division of Revenue — Official Portal: revenue.delaware.gov ↗
DOR — Payment Plan Options: revenue.delaware.gov/collections/other-payment-options ↗
DOR — Releasing a Notice of Judgment: revenue.delaware.gov/collections/releasing-notice-judgment ↗
DOR — Garnishments: revenue.delaware.gov/collections/warrants ↗
DOR — Trust Fund Recovery: revenue.delaware.gov/collections/trust-fund-recovery ↗
DOR — Tax Appeal Process: revenue.delaware.gov/tax-appeal-process ↗
Delaware Tax Appeal Board — Rules and Functions: finance.delaware.gov/publications/tab_rules/tabfunctions.shtml ↗
Secretary of State — Franchise Tax: corp.delaware.gov/frtax ↗
Delaware Division of Corporations — Franchise Tax Calculator: corp.delaware.gov/frtaxcalc ↗
DOR — Gross Receipts Tax FAQs: revenue.delaware.gov/frequently-asked-questions/gross-receipts-tax-faqs ↗
DOR — Doing Business in Delaware: revenue.delaware.gov/business-tax-forms/doing-business-in-delaware ↗
Delaware Code — Title 30 — Taxation: delcode.delaware.gov/title30 ↗
Delaware Code — Title 8, Chapter 5 — Corporations: delcode.delaware.gov/title8/c005 ↗

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Not Sure What to Do With Your Delaware Tax Situation?

Select the card that matches your situation to jump to the relevant section.

Received a Notice of Proposed Assessment

Review the protest deadline first (60 days general; 30 days for withholding). Do not let the deadline pass.

Jump to Appeals Section →

Cannot Pay in Full

Review payment plan options. Delaware offers plans up to 48 months via ACH without judgment. Delaware's official collection materials do not describe a formal Offer in Compromise program.

Jump to Payment Plan Section →

Penalties Are the Main Issue

Review penalty abatement options and what documentation may be needed for reasonable cause under Delaware law.

Jump to Penalty Relief Section →

Judgment, Levy, or Garnishment Started

Act immediately. Delaware judgments last 20 years and are renewable for another 20. Bank levies have a 20-day hold period.

Jump to Lien Section → | Jump to Levy Section → | Jump to Garnishment Section →

Business Franchise or Gross Receipts Tax Debt

Franchise taxes are administered by the Secretary of State, not DOR. Unpaid franchise taxes can lead to charter revocation. Get help before making random payments.

Jump to Business Tax Section →

Unfiled Tax Returns

Unfiled returns block most resolution options. File accurate returns before applying for a payment plan or penalty abatement.

Jump to Unfiled Returns Section →

Corporate Franchise Tax Notice

All DE corporations must pay franchise tax regardless of where they do business. Due March 1. Charter may be revoked after one year of non-payment.

Jump to Franchise Tax Section →

Trust Fund Recovery Penalty Notice

Responsible persons face 100% personal liability for willful failure to pay over withheld taxes. This is one of the most serious tax penalties.

Jump to Trust Fund Recovery Section →

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Frequently Asked Questions

Can I get a payment plan for Delaware state taxes?

Yes. Delaware offers installment payment plans for individuals and businesses. Plans up to 24 months are available as standard installment agreements. Plans from 24 to 48 months require automatic deduction (ACH) or voluntary wage deduction to avoid a tax lien. Plans exceeding 48 months require the Division of Revenue to file a judgment to protect the state's interest. While on a plan, interest and penalties continue to accrue, and Delaware will offset any Delaware, Maryland, or federal refund to your balance.

Does a Delaware payment plan stop penalties and interest?

No. A payment plan lets you pay over time, but interest continues to accrue at 0.5% per month (6% annual), compounded monthly, on the unpaid balance during the plan. Penalties already assessed remain unless separately abated through Delaware's reasonable cause process. The plan does not erase the underlying tax debt. If you default, collection action may resume immediately.

Can Delaware take my state or federal refund while I am on a payment plan?

Yes. Delaware will offset any Delaware, Maryland, or federal refund to your balance due while you are on an installment agreement. The payment plan does not prevent refund offset. Collection by setoff against tax refunds may occur whenever there exists an unpaid assessment of tax, interest, penalties, or additions to tax under 30 Del. C. Section 553(c).

Does Delaware have an Offer in Compromise program?

Delaware's current official collection materials do not describe a formal Offer in Compromise (OIC) program. Delaware's official collection materials emphasize payment arrangements, refund offsets, judgments, and enforcement tools rather than a formal tax-settlement program. Your resolution options are generally limited to payment plans, penalty abatement for reasonable cause, paying in full, or filing an appeal.

Does Delaware have a sales tax?

No. Delaware does not impose a state or local sales tax. However, Delaware imposes a gross receipts tax on sellers of goods and providers of services, ranging from 0.0945% to 2.4218% depending on the business activity. The Gross Receipts Tax is imposed on the seller, not the consumer. There are no deductions for cost of goods sold, labor, interest, or taxes paid.

What is Delaware's corporate franchise tax?

The Delaware corporate franchise tax is administered by the Secretary of State, Division of Corporations (not the Division of Revenue). All corporations incorporated in Delaware must file an annual franchise tax report and pay the tax, regardless of where they conduct business. The minimum is $175 (authorized shares method) or $400 (assumed-par-value capital method). The maximum is $200,000 ($250,000 for large corporate filers). Taxes and annual reports are due March 1st of each year. If franchise taxes are unpaid for one year, the charter may be declared void.

How long is a Delaware tax lien?

A Delaware tax judgment lien automatically continues for 20 years from the date of its entry (30 Del. C. Section 554(c)). The director may renew the judgment lien for an additional 20-year term by filing a renewal certificate before the original 20-year period expires, for a total potential duration of 40 years. No property—including wages, bank deposits, real or personal property—is exempt from execution or attachment upon a tax judgment.

What is a Delaware Notice of Proposed Assessment?

A Notice of Proposed Assessment is a formal determination by the Delaware Division of Revenue that you owe a specific amount of tax, penalties, and interest. It is issued when returns were not filed, taxes remain unpaid, or the DOR determines additional tax is due. Once issued, it triggers appeal deadlines. You generally have 60 days (30 days for withholding taxes; 120 days if outside the U.S.) to file a written protest with the director.

Can I appeal a Delaware tax assessment?

Yes. Taxpayers may file a written protest with the director within 60 days of a notice of proposed assessment (30 days for withholding taxes; 120 days if outside the U.S.). Written protests should be mailed to: Division of Revenue, State of Delaware, P.O. Box 8714, Wilmington, DE 19899-8714. The director's determination becomes final at the end of the protest period, unless you seek review by the Tax Appeal Board. From any tax appeal board decision, you may appeal to the Superior Court within 30 days.

Can Delaware waive penalties?

Yes. Penalties may be abated if the taxpayer shows "reasonable cause and not due to wilful neglect" under 30 Del. C. Sections 534(a) and 534(b). The director is also authorized to abate unpaid assessments that are excessive, assessed after the statute of limitations, erroneously or illegally assessed, or where collection costs would not warrant collection under 30 Del. C. Section 538. Requests should be submitted to the Tax Conferee at Delaware Division of Revenue, P.O. Box 8714, Wilmington, DE 19899, or emailed to taxconferee@delaware.gov.

Can Delaware garnish wages for state taxes?

Yes. The Delaware Division of Revenue may garnish wages, bank accounts, and other property after filing a Notice of Judgment. A garnishment requires a filed notice of judgment and a 10-day advance notice before action. The director may garnish wages, salaries, and other amounts due from any person owing property to a judgment debtor. For bank levies, the bank must hold funds for 20 days before remitting to the Division, allowing the taxpayer time to resolve issues.

What is Delaware's Trust Fund Recovery Penalty?

Delaware has a trust fund recovery penalty equal to 100% of the unpaid tax for any person who willfully fails to collect, account for, or pay over withholding or other trust fund taxes (30 Del. C. Section 535(e)). A "responsible person" includes officers, employees, directors, shareholders, partners, LLC members, or any person with authority to direct the disbursement of funds. "Willfulness" means intentional, deliberate, voluntary, and knowing conduct—not accidental. It includes using available funds to pay other creditors while withholding taxes remain unpaid.

Can Delaware revoke my corporation's charter for unpaid taxes?

Yes. Under 8 Del. C. Section 511, if any corporation neglects or refuses to pay franchise taxes for one year, its charter may be declared null and void by gubernatorial proclamation. The secretary of state shall report such corporations to the governor by June 30. Additionally, under 8 Del. C. Section 508, the Attorney General may seek an injunction to restrain a corporation from exercising any franchise if franchise tax has been in arrears for 3 months.

What if I have unfiled Delaware tax returns?

Unfiled returns can block most resolution options. The Division of Revenue may estimate your tax and issue assessments that are higher than what you actually owe. Filing accurate returns can sometimes reduce an incorrect balance. Do not rush or file bad returns—get them prepared correctly with the right income, deductions, and credits. For corporations, unfiled franchise tax reports can lead to charter revocation.

Does a Delaware payment plan stop collection?

No. While on an installment agreement, interest and penalties continue to accrue on the unpaid balance. Delaware will also offset any Delaware, Maryland, or federal refund to the balance due. Payment plans over 24 months require automatic deduction (ACH) or voluntary wage deduction to avoid a tax lien. Plans with terms of 48 months or more require a judgment filing. If you default, collection action may resume immediately.

What is Delaware's corporate income tax rate?

Delaware's corporate income tax rate is 8.7% of federal taxable income allocated and apportioned to Delaware. Starting in tax year 2020, apportionment for unallocated income is based only on Delaware gross receipts as a share of total U.S. gross receipts for interstate businesses (30 Del. C. Chapter 19). Corporations incorporated in Delaware but not conducting business in Delaware are NOT subject to corporate income tax, but must still pay franchise tax.

What are Delaware's personal income tax rates?

Delaware personal income tax rates are graduated, ranging from 2.2% to 5.55% for taxable income under $60,000, and up to 6.6% for higher incomes. The standard deduction is $3,250 for single filers and $6,500 for married filing jointly. The personal exemption credit is $110 per exemption.

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Disclaimer: This page provides general information about Delaware state tax collection procedures and is not legal advice. Tax laws and agency procedures change. Always consult the official Delaware Division of Revenue website or a qualified tax professional for advice specific to your situation. No guarantee of any particular outcome is expressed or implied. Delaware's official collection materials do not describe a formal offer-in-compromise program, and approval of payment plans and penalty abatement requests is discretionary.