NOTE: All withholding agents having no prior record of withholding will file on a monthly basis until the next "lookback period."
NOTE: Payments must be made separately for each entity. Do not remit payments under one identification number and then submit W3, W2 or 1099 forms for multiple identification numbers.
Every employer maintaining an office or conducting business in Delaware who makes a payment of wages or other remuneration to a resident or non-resident (of Delaware) must pay Withholding Tax. Withholding Tax requires that a business withhold an estimated amount of tax from its employees. New employees must file Federal Form W-4 or Form W-4A regarding exemptions. Based on that information, the employer is to withhold an appropriate tax from the employee's compensation.
Every year, employers must supply each employee with a statement showing their total wages earned and the amount of taxes withheld on a W-2 form. Employers must mail W-2 forms to all employees by January 31st. Employers must additionally file a Reconciliation of Monthly/Quarterly/Eighth-Monthly Returns on a W-3 form with a duplicate of all W-2 forms to the Division of Revenue before February 28th.
The Division of Revenue requires that any employer required to file withholding to the Federal government on magnetic media or floppy disc, file with Delaware in the same manner. Filing by magnetic media for all other employers is optional, but highly recommended.
Additional information: Withholding of Delaware Income Tax, Regulations, Employer's Duties, and Withholding Tables.
NOTE: Effective for tax periods after December 31, 2013, the income tax rate for income in excess of $60,000 will decrease to 6.6%. For tax periods after December 31, 2011 and before January 1, 2014, the income tax rate for income in excess of $60,000 is 6.75%. For taxable years beginning after December 31, 2009 and before January 1, 2012, the tax rate on income in excess of $60,000 is taxed at 6.95%.
For more information on business licenses, please contact the business license department at (302) 577-8778 or BusTax@state.de.us.