Delaware LLC Taxes: The Complete Filing Guide (2025)

Delaware LLC Tax Basics

Navigating your Delaware LLC tax obligations doesn’t have to be complicated. We’ll walk you through the essentials of pass-through taxation, explain Delaware’s specific requirements, and highlight strategies to stay compliant and organized. This guide covers everything from federal income taxes to city-specific requirements and filing deadlines.

Use the links below to jump directly to the section you need:

• Delaware LLC Taxes at a Glance
• Understanding LLC Taxation Basics
• Federal Tax Obligations
• Delaware State Taxes
• Local Tax Considerations
• Tax Calendar and Filing Tips
• Tax Strategies for Delaware LLCs
• Forms and Resources

Delaware LLC Taxes at a Glance

Tax Type	Rate	Filing Deadline	Forms Required
Federal Income Tax	10-37% (personal brackets)	April 15, 2025	Form 1040 + Schedule C or Schedule E/K-1
Self-Employment Tax	15.3%	April 15, 2025	Schedule SE
Delaware Income Tax	0%-6.6%	April 30, 2025	Form PIT-RES
Delaware Corporate Income Tax	8.7%	April 15, 2025	Form CIT-TAX
Federal Payroll Taxes (If Employees)	7.65% employer + 7.65% employee (FICA)	Quarterly (April 30, July 31, October 31, January 31)	Form 941
Delaware Unemployment Tax (If Employees)	0.6%-5.6% (new employers: 1.2%)	Quarterly	Form UC-8
Federal Unemployment (FUTA)	6% on first $7,000 per employee (0.6% after credits)	January 31, 2026 (annual)	Form 940
Gross Receipts Tax	0.0945%-1.9914%	Monthly or quarterly	Filed online
City Wage Tax	1.25%	Monthly or quarterly	Form WCWT-5
Annual Franchise Tax	$300	June 1, 2025	Filed online

Understanding LLC Taxation Basics

How Delaware LLCs Are Taxed By Default

Your Delaware LLC doesn’t pay taxes itself. Instead, profits flow through to you and your members, who report them on personal tax returns. This is called pass-through taxation.

Here’s how it works:

1. Your LLC earns income from business activities
2. The LLC itself files no tax return (unless you elect otherwise)
3. Profits “pass through” to members based on ownership percentage
4. Each member reports their share on their personal tax return
5. Members pay tax at their individual income tax rates

What this means for you: Unlike corporations, your business profits are only taxed once, which typically saves money.

Tax Classification Options

While pass-through taxation is the default, your Delaware LLC can choose alternative tax treatments:

Default LLC Tax Status:

• Single-member LLC: Taxed as a sole proprietorship
• Multi-member LLC: Taxed as a partnership

Optional Tax Classifications:

• S Corporation: Can reduce self-employment taxes by paying “reasonable salaries”
• C Corporation: LLC pays corporate tax on profits, members pay personal tax on distributions (creates double taxation)

Not sure which tax classification is right for your business? Schedule a free consultation with 1-800Accountant.

Federal Tax Obligations

Income Tax

As a Delaware LLC owner, you’ll report your share of business profits on your personal tax return using:

• Form 1040 + Schedule C (single-member LLCs)
• Form 1040 + Schedule E + Schedule K-1 (multi-member LLCs)

Federal income tax rates range from 10% to 37% based on your tax bracket (actual brackets will depend on inflation adjustments and any tax law changes).

Simply Put: Whatever money your business makes (after expenses) gets added to your personal tax return, just like income from a job.

Self-Employment Tax

LLC members actively involved in the business must pay self-employment tax of 15.3% (covering Social Security and Medicare) on their share of LLC profits.

Key points:

• Applies to net earnings of $400 or more
• Calculated on Schedule SE
• You can deduct 50% of the self-employment tax as an “above-the-line” deduction, which lowers your adjusted gross income

What happens if I miss this payment? The IRS charges penalties of 0.5% per month plus interest. However, first-time mistakes can often qualify for penalty abatement if you have a clean compliance history.

Employment Taxes

If your LLC has employees, you must:

• Withhold federal income tax
• Pay and withhold FICA taxes (7.65% each for employer and employee)
• Pay federal unemployment tax (FUTA)
• File quarterly employment tax returns (Form 941)
• Provide W-2 forms annually

Estimated completion time: 2-3 hours per quarter (significantly less with payroll software or professional help)

Estimated Tax Payments

Because no tax is withheld from your LLC profits, you’ll likely need to make quarterly estimated tax payments using Form 1040-ES. These payments cover both income and self-employment taxes on your share of the business income. Missing deadlines or underpaying can lead to IRS penalties, even if you pay in full later.

Working with an accountant can help ensure accurate calculations, on-time payments, and a smarter overall tax strategy.

Key deadlines:

• April 15
• June 16
• September 15
• January 15

Pro Tip: Set calendar reminders 15 days before each deadline. This gives you time to prepare without the last-minute rush that leads to mistakes.

Delaware State Taxes

Delaware Income Tax

Delaware has a personal income tax rate of 0%-6.6% that applies to your LLC’s profits on your personal return.

Filing requirements:

• Use Delaware Form PIT-RES
• Due April 30, 2025

Delaware Corporate Income Tax 

If your LLC has elected to be taxed as a C corp, you will be required to pay an 8.7% corporate income tax. 

Filing Requirements: 

• Use Delaware Form CIT-TAX
• Due April 15, 2025 

Gross Receipts Tax 

Delaware does not impose a sales and use tax but does impose a gross receipts tax on sellers of goods and services’ business revenue. 

If your LLC sells goods or provides services in the state, it is subject to this tax. 

• Rate varies by business type 
• Register through the Delaware Taxpayer Portal 
• Gross receipts tax must be filed online
• Due monthly or quarterly depending on business’ total gross receipts 

Payroll Taxes 

If you have employees in Delaware, you will be responsible for two types of payroll taxes. 

Unemployment Insurance (UI) Tax 

• Register through the Delaware Department of Labor
• Rate is 1.2% for new employers (0.6%-5.6% afterwards) 
• Due quarterly 
• File using Delaware Form UC-8

Withholding Tax 

• Register using the Delaware One Stop
• Rate ranges from 0%-6.6% depending on employee income
• Due online semi-weekly, monthly, or quarterly  

Annual Franchise Tax Filing

While LLCs are not required to file a full annual report in Delaware, your LLC must pay an annual franchise tax: 

• Due June 1 each year
• $300 filing fee
• Filed with Delaware Division of Corporations 

Calendar Alert: Set a reminder for May 1 to ensure you don’t miss this easy but required filing.

Local Tax Considerations

City Wage Tax

Delaware allows cities to impose a 1.25% city wage tax. This currently only applies to businesses in Wilmington, Delaware. 

Filing requirements:

• Use Delaware Form WC-WT-5 
• Due monthly or quarterly 

Property Taxes

If your LLC owns real property in Delaware:

• Rates vary by county (average rate is 0.53%) 
• May qualify for various exemptions based on business type
• Personal property such as vehicles, furniture, or equipment is not taxable
• Use the Incorporated Municipalities Directory to contact your local governing body for more information 

Tax Calendar and Filing Tips

Key Deadlines for Delaware LLCs

January:

• January 15: Final estimated tax payment for previous year
• January 31: Issue W-2s/1099s to employees/contractors
• January 31: Fourth quarter payroll tax payment due (state and federal) 

April:

• April 15: Corporate income tax returns due
• April 15: Federal income and self-employment tax returns due
• April 15: First quarter estimated tax payment due 
• April 30: First quarter payroll tax payment due (state and federal) 
• April 30: Personal income tax return due

June: 

• June 1: Annual franchise tax due 
• June 16: Second quarter estimated tax due 

July: 

• July 31: Second quarter payroll tax payment due (state and federal) 

September:

• September 15: Third quarter estimated tax payment due

October:

• October 31: Third quarter payroll tax payment due (state and federal) 

Record-Keeping Checklist

Keep these records for at least 7 years:

• Business income records (invoices, receipts)
• Expense receipts and documentation
• Bank and credit card statements
• Asset purchase and improvement records
• Vehicle mileage logs
• Home office documentation
• Payroll records
• Previous tax returns

Tax Strategies for Delaware LLCs

S Corporation Election Benefits

Converting your LLC to an S Corporation for tax purposes can save on self-employment taxes:

1. File Form 2553 with the IRS
2. Pay yourself a “reasonable salary” subject to employment taxes
3. Take remaining profits as distributions exempt from self-employment tax

Example: An LLC making $100,000 in profit pays 15.3% self-employment tax on the entire amount. As an S Corp, if $60,000 is a reasonable salary and $40,000 is taken as distributions, only the $60,000 is subject to employment taxes.

Potential Savings: In this example, you’d save about $6,120 in self-employment taxes.

Business Expense Deductions

Common deductions Delaware LLC owners often overlook:

• Home office deduction
• Business mileage (70¢ per mile for 2025)
• Health insurance premiums
• Retirement plan contributions
• Professional development expenses
• Business meals (50% deductible)

Forms and Resources

Federal Tax Forms

• Schedule C: Profit or Loss From Business (sole proprietors)
• Form 1065: U.S. Return of Partnership Income
• Schedule K-1: Partner’s Share of Income, Deductions, Credits
• Form 1120-S: U.S. Income Tax Return for an S Corporation
• Form 2553: Election by a Small Business Corporation (S Corp)
• Form 8832: Entity Classification Election

Delaware Tax Forms

• Form PIT-RES: Delaware Individual Income Tax Return
• Form CIT-TAX: Delaware Corporate Income Tax Return
• Form UC-8: Delaware Unemployment Insurance Tax Return

Helpful Resources

• Delaware Department of Revenue
• Delaware Division of Corporations 
• Internal Revenue Service
• Delaware One Stop