Delaware Corporate Income Tax

In this section, we will detail Delaware’s income tax. There are two types of income tax in Delaware: 1) Delaware corporate income tax and 2) Delaware's personal income tax. For more information about Delaware's personal income tax, visit this page.

What is Delaware’s corporate income tax rate?

Delaware's corporate income tax rate is 8.7% and is based on the federal taxable income of the corporation.

What entities must file and/or pay Delaware corporate income tax?

If your corporation is domestic or foreign and conducts business in Delaware, you'll be required to file a corporate income return. Your corporation may be exempt under Section 1902(b), Title 30 of the Delaware code.

What is the form that Delaware requires to be filed each year?

Tax return Form 1100 is the Delaware form that must be filed each calendar year ending in December or at the end of your fiscal year.

What is the due date for filing a Delaware corporate income tax return?

If your tax year is based on a calendar year that ends December 31, you'll need to file a corporate tax return on or before April 15.

If your corporation is on a fiscal year (meaning the year end is any month other than December), then the Delaware corporate income tax return is due on or before the fifteenth of the fourth month following the close of the fiscal year. If you obtain a federal extension, then Delaware automatically extends your due date as well. If you elect to file for an extension, you are still required to pay any estimated taxes due.

Does Delaware accept consolidated returns?

No. Under Delaware law, consolidated corporate income tax returns are not allowed. Each corporation must file a separate corporate tax return detailing income and deductions.

How does Delaware treat S-Corporations?

If you have elected to be taxed as a S-corporation and you have income from sources from within Delaware, you will be required to file a Form 1100S (S-corporation Reconciliation and Shareholders Information Return). Delaware does not impose corporate income tax on pass-through income because Delaware recognizes the federal S election.

What are the estimated tax filing requirements of an S-Corporation?

Every S-Corporation deriving income from sources within Delaware must make estimated payments of personal income tax on behalf of its non-resident shareholders. Payments are based on the non-residents’ share of the distributive income of the corporation. Resident and non-resident shareholders must report their respective share of S distributive income on their individual personal income tax returns.
 

Does Delaware have a minimum corporate income tax?

No. Delaware does not having any laws that require the payment of a minimum corporate income tax.

Does Delaware permit the carry back of a net operating loss (NOL)?

Delaware law allows businesses that have a net operating loss in one year to look back or carry back no more than $30,000 for each of the prior two (2) years in order to offset any profit. The period of carryforward is 20 years.

Is a copy of a corporation’s federal income tax return (Form 1120, 1120A or 1120S) required to be attached to the Delaware corporate return?

Yes. Delaware law requires that every corporation filing a Delaware corporate income tax return must attach a copy of their federal tax return, including all attachments and schedules.

What are the corporate income tax filing requirements for an exempt (non-profit) corporation?

If your corporation is recognized by the IRS as a 501(c)3 non-profit company, you do not have to file a Delaware corporate income tax return. However, most Delaware non-profit (exempt) corporations are required to complete and file an annual report with the Delaware Division of Corporations.

What are the corporate income tax filing requirements for a holding company?

If you have a Delaware corporation and it's activities are limited to the management and maintenance of intangible investments, your corporation may be exempt from corporate income tax. You will be required to submit Form 1902AP, Application of Exemption, to obtain a specific ruling. You will need to describe your corporation's operations and state the grounds for the exemption under Section 1902(b)(8), Title 30, of the Delaware Code.

What penalties apply to late filing and/or payment of corporate income tax?

A penalty of 5% per month, plus interest at the rate of 0.5% per month from the original due date will be due for any corporate income tax returns filed late. Additional penalties of 1% per month is imposed for failure to pay the tax liability shown to be due on a timely filed return.

Does Delaware accept filing of corporate income tax return information through electronic data or magnetic media?

No. Unfortunately, Delaware does not accept electronic filing of corporate income returns. Delaware law requires that all returns, including attachments and schedules, be filed in paper form.

Thank you for your interest in Delaware corporate income tax. If you have any questions about incorporating in Delaware, please call our office at 1-800-423-2993 or 302-996-5819.

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