(DELaware) Delaware will change its state personal income tax starting with taxable years beginning after December 31, 2025, and the new income tax brackets will apply across all filing statuses. For immigrants and other new residents, that timing matters because 2026 withholding, estimated payments, and household budgeting will shift under House Bill 13.
The core change is a new bracket schedule that lowers some rates at the bottom, merges some middle bands, and adds two new higher brackets above $125,000, while keeping the $60,000–$125,000 band at 6.6%. People moving to Delaware for work on employment visas, families adjusting after a relocation, and international students starting Optional Practical Training often feel state tax changes quickly, because payroll withholding tends to update as soon as employers implement new tables.
2026 Delaware income tax brackets set by House Bill 13
For the 2026 tax year, Delaware House Bill 13 sets these state rates and taxable income ranges, using the same structure for every filing status. These are marginal rates, applied in layers as income rises:
- 2.0% on taxable income over $2,000 but not over $5,000
- 4.0% on taxable income over $5,000 but not over $20,000
- 5.5% on taxable income over $20,000 but not over $60,000
- 6.6% on taxable income over $60,000 but not over $125,000
- 6.75% on taxable income over $125,000 but not over $250,000
- 6.95% on taxable income over $250,000
Important: If you only look at the top rate, it is easy to overestimate the real change. What matters for most households is how much of their taxable income lands in each band.
How this differs from the prior structure through 2025
Before House Bill 13, Delaware had seven brackets and a top rate of 6.6% on income over $60,000. The prior schedule included:
- 2.2% on taxable income from $2,000–$5,000
- 3.9% on taxable income from $5,000–$10,000
- 4.8% on taxable income from $10,000–$20,000
- 5.2% on taxable income from $20,000–$25,000
- 5.55% on taxable income from $25,000–$60,000
- 6.6% on taxable income over $60,000
House Bill 13 consolidates parts of the middle, adjusts lower-range rates (for example, 2.0% instead of 2.2%, and 5.5% instead of 5.55%), and adds 6.75% and 6.95% brackets above $125,000.
Why this matters for immigrants: Many newcomers focus first on federal tax and rent, then get surprised by state withholding differences. Delaware’s change does not rewrite the whole system, but it does change the slope once taxable income crosses $125,000.
The calculation method: base tax plus marginal rate
Delaware uses a “base amount plus marginal rate on excess” method for each bracket. This is common in state tax tables and is key to reading withholding schedules.
Example from House Bill 13 for the over $60,000 but not over $125,000 bracket:
- $2,943.50 base (built from lower brackets), plus
- 6.6% of the amount over $60,000
The bill specifies that intermediate results are rounded to the penny before they are added. For workers paid hourly or with uneven pay cycles (overtime, shift premiums), penny-rounding can affect small per-paycheck differences that add up over a year.
Effective date: why 2026 is the first year affected
The changes apply to taxable years beginning after December 31, 2025, meaning the 2026 tax year. In practice, that typically affects:
- Paychecks issued in 2026, once employers update withholding tables
- Estimated tax payments due during 2026 for people who pay quarterly
- The Delaware return filed in 2027 for 2026 income
Effective for tax years starting after 12/31/2025, plan for 2026 withholding and estimated payments. Check the Delaware Division of Revenue updates to align payroll, refunds, and quarterly estimates.
For immigrants who land mid-year, timing can split the story: what you owe as a part-year resident versus what your employer withheld after you started. A mid-2026 arrival will likely have Delaware withholding that reflects the new brackets, but the total state tax bill still depends on how much Delaware taxable income you earned after moving.
What “same structure for all filing statuses” means
House Bill 13 applies the same bracket thresholds to all filing statuses. That differs from systems where married filing jointly get wider bands. In Delaware, the thresholds above apply regardless of filing status (single, married filing jointly, etc.).
This matters when:
- One spouse receives work authorization mid-year and the second income begins later
- Dual-career couples in high-paying sectors see household income rise quickly
Because thresholds do not expand by filing status, combined taxable income hits each Delaware bracket at the same dollar points, making planning more direct but potentially exposing households to higher marginal rates sooner.
Who benefits most from lower-bracket cuts
The lower-rate adjustments are small but meaningful for:
- Low-wage workers
- International students with part-time jobs
- New arrivals in entry-level roles
Notable changes:
- 2.0% vs. prior 2.2% for $2,000–$5,000
- 5.5% vs. prior 5.55% for $20,000–$60,000
Many new immigrants see wage jumps (credential evaluations, licensing, job changes). The consolidated middle ranges and cleaner 4.0% / 5.5% structure can simplify withholding impacts compared with the previous split bands.
Who is most exposed to the new higher brackets
The major policy shift is adding two brackets above $125,000:
- 6.75% on taxable income over $125,000 but not over $250,000
- 6.95% on taxable income over $250,000
This affects:
- Employment-based immigrants in high-paying fields (specialized health care, tech)
- Executives and managers transferred to Delaware
- Dual-income households where earnings stack quickly
- People with large bonuses, commissions, or equity income in a single year
Because Delaware is marginal, higher rates apply only to the slice of income in those bands. Still, withholding mismatches (especially on one-time payments) can create cash-flow stress.
Brackets are not inflation-adjusted — long-term implications
House Bill 13’s brackets are not inflation-adjusted. Over time, wage growth can push more taxable income into higher bands even if real purchasing power doesn’t increase.
For immigrants planning to settle long-term:
- Raises and normal wage growth can move you into higher brackets over several years
- This differs from countries that index tax thresholds to inflation and should shape thinking about overtime, second jobs, and side work
Standard deductions and Delaware’s link to federal rules
Delaware’s standard deductions remain tied to federal rules. The state starts with federal adjusted gross income and then applies Delaware adjustments.
For immigrants, federal filing status and residency tests often determine the federal base that Delaware uses. Once that federal base is set, House Bill 13’s brackets determine how state tax layers on.
When comparing a move from Pennsylvania or New Jersey, the take-home pay change depends on:
- Rates and brackets
- Withholding defaults
- Local taxes in neighboring states
- How quickly payroll adopts new Delaware tables
Payroll withholding, estimated taxes, and common newcomer mistakes
The practical impact often appears first in withholding. Employers with Delaware payroll must update systems for 2026, but employees should also act. Common errors by newcomers:
- Treating withholding as the final tax bill and being surprised at filing time
- Not updating payroll after a move, causing multi-state withholding issues
- Ignoring bonus withholding effects after relocation or promotion
- Missing estimated payments when having large non-wage income
Don’t assume a higher bracket tax applies to all your income. Delaware uses marginal rates; only the income above each threshold is taxed at the higher rate, not your entire paycheck.
Recommended actions:
- Revisit withholding after marriage, a spouse starting work, a major raise, or a move into Delaware.
- Keep payroll and residency records accurate to avoid multi-state withholding.
- Monitor bonus timing and adjust estimated payments if needed.
For official state guidance and updates, Delaware taxpayers can check the Delaware Division of Revenue website, the state’s main public source for income tax administration.
Why Delaware made the change: revenue, housing, and education
The amended House Bill 13 package reflects the governor’s priorities, tying the plan to funding for housing and education. The bill is expected to generate about $16.5 million in additional revenue in 2026.
Notes:
- Earlier proposals discussed brackets up to $500,000, but that was not included in the final text.
- State-level tax shifts can influence where mobile professionals choose to live, especially in metro areas where moving across a state line changes withholding overnight (analysis referenced by VisaVerge.com).
Real-life immigration scenarios
State tax changes have practical consequences for immigrant households. Three examples:
- A nurse recruited from abroad arrives in early 2026 and works overtime. Lower and middle bracket changes affect first-year take-home pay during major resettlement expenses.
- A manager transferred on a work visa receives a large move-related bonus. Income above $125,000 may fall into higher Delaware bands and withholding on one-time payments may not match the final tax.
- A married couple both begin jobs in Delaware after one spouse gains work authorization. Because thresholds don’t widen by filing status, combined income can hit upper bands faster than expected.
In each case, the bracket shape — not just the top rate — changes how much of each additional dollar is kept.
Cross-border commuters and regional labor-market considerations
Delaware is part of a dense regional labor market where many workers cross state lines. Common situations:
- Live in one state and work in Delaware, or vice versa
- Residency and wage sourcing rules determine tax obligations
- Mismatches between employer records and actual residence can cause withholding errors that take months to fix
Advice: keep a clean paper trail (lease start dates, move-in dates, first day of work in Delaware) to support part-year residency positions and resolve disputes.
Understanding marginal rates: don’t panic
A frequent newcomer myth is that entering a higher bracket taxes all income at that higher rate. Delaware, like the federal system, taxes income in layers. For example, under House Bill 13, only the portion of income above $250,000 is taxed at 6.95%; lower slices remain taxed at their respective lower rates.
Key takeaway: A raise that pushes you into a higher bracket generally still increases take-home pay overall because only the top slice is taxed at the higher marginal rate.
Implementation: what to watch for in 2026
As 2026 approaches, the administrative details matter most for real paychecks:
- Updated withholding tables and payroll system changes
- State guidance translating the bracket law into practical instructions
- Rounding rules and the “base plus marginal rate” calculation style
For workers and employers, the next step is matching withholding to the new law so 2026 paychecks reflect the correct Delaware income tax brackets, especially for households with fluctuating income during the year.
Delaware is overhauling its income tax system for 2026 under House Bill 13. The update lowers initial rates for low earners but creates higher tax responsibilities for high-income households by adding brackets above $125,000. Crucially, the thresholds remain the same for all filing statuses. Newcomers must monitor their payroll withholding to avoid surprises during the 2027 filing season, particularly if they are high-earning professionals or dual-income couples.
