Withholding Taxes: Delaware

Federal law and guidance on this subject should be reviewed together with this section.

Author: Alice Gilman

Summary

• Wages paid to Delaware residents who work in the state are subject to withholding. An employee is a Delaware resident for income tax purposes if certain criteria are met. Delaware income tax must also be withheld from wages paid to Delaware nonresident employees for services performed in the state. See Withholding on Residents, Nonresidents and Expatriates.
• Delaware employers determine state income tax withholding using Form DE-W4. See Employee Withholding Forms.
• The withholding rate on supplemental wage payments, such as bonuses, is calculated differently depending on when the supplemental wage payments are made. See Supplemental Wages.
• Each year employers must provide copies of federal Form W-2, Wage and Tax Statement, to each employee from whom any amount of Delaware income tax was withheld, or would have been withheld under the approved tables and other methods if the employee had claimed no more than one withholding allowance. See Form W-2 Reporting Requirements.
• Employers are required to keep records of wages paid and taxes withheld. See Recordkeeping Requirements.
• Wilmington has requirements pertaining to income tax withholding. See Local Requirements.