Hibou Odoo Suite Enterprise: State of Delaware : Filing State Income Taxes, W2s, and 1099s


Purpose

The purpose of this documentation is to outline the processes and requirements associated with filing state income taxes as well as how to file W-2s and 1099s, if needed, in the state of Delaware.

State Income Tax Withholding 

Delaware accepts Federal Form W-4 for an employee to claim personal exemptions.

An employee is entitled to the same number of withholding allowances as he or she is entitled to for Federal Income Tax withholding purposes. Thus, an employer may rely upon the number of Federal withholding allowances claimed by the employee. However, due to the difference between Federal and State deductions and credits, it may be necessary for an employee to claim either an additional number or a lesser number of withholding allowances for State purposes. In such cases, the employee shall file Federal Form W-4, or equivalent provided by the employer with the number of allowances claimed and the words, "for State of Delaware Purposes”.

There are two methods for estimating the number of withholding allowances for state taxes. The more detailed method requires a State Form SD/W-4A It is offered only as a worksheet for determining the appropriate number of Delaware withholding allowances for those who believe their tax computation is complicated by non-wage income and substantial deductions.

In lieu of the worksheet method, there is a practical and convenient rule of thumb for individuals who wish to compute separately the number of withholding allowances for federal and state taxes. Starting with the number of personal exemptions to be claimed on the tax return itself, the state computation is as follows:

  • For each $2,000 by which your itemized deductions, net of state income taxes paid, exceed the $3,250 standard deduction, take one additional allowance.

  • For each $2,000 of non-wage income that you expect to receive, take one fewer allowance.

Employers receiving withholding exemption certificate (Federal form W-4 or W-4A), shall be required to send a copy of such certificate to the Division of Revenue within 5 working days, providing that either of the following is claimed by an employee:

  • The total of allowances claimed for Delaware Personal Income Tax purposes on the certificate is fourteen (14) or more allowances or

  • The certificate indicated that the employee claims to be exempt from withholding Delaware Income Tax and the employer reasonably expects the employee’s wages to exceed $168.50 per week.

Copies of these exemption certificates shall be mailed to Assistant Director, Office of Personal Income Taxes, Division of Revenue, P.O. Box 2044, Wilmington, DE 19899-2044

Employers are required to keep a copy of a completed W-4 form for their employees in their files. The forms serve as verification that state income taxes are being withheld according to the employee’s instructions and needs to be available for inspection if the state requests it. 

W-4 forms are generally valid until the employee provides new ones. However, employees who claim exemption from withholding must renew the exemption annually by filing new W-4 forms by February 15th each year. 

State Income Tax Withholding Reporting and Deposits

Good to Know!

Those with no prior record of withholding will file on a monthly basis until the next “lookback period”.

    Withholding filing methods are determined using a “lookback period,” which is from July 1 to June 30 in the year immediately preceding the calendar year for which the period is being determined.

    The Division of Revenue looks at this time annually to determine how much tax you’ve reported. The amount you’ve reported determines whether you will have to remit your withholding monthly, quarterly, or 8th monthly.

    The withholding thresholds are listed below:

    FrequencyLook-back Wage Withholding Threshold
    Due Dates
    Quarterly$4,570 or less
    Last day of the month following the close of the calendar quarter.
    Monthly$4,570.01 to $25,410
    On or before the 15th day of the following month.
    Monthly$25,000.01 or greater
    On or before the third business day following any Friday.

    For further details on due dates, see the State of Delaware Withholding Tax Due Dates for Calendar Year 2019

    After a withholding application is filed with the Division of Revenue, you should receive your personalized withholding tax forms within a few weeks. Tax forms will not be sent to those who file electronically.

    W-2 and 1099 Forms 

    All employers are encouraged to submit annual W-2 and 1099 reports online.

    If W-2 or 1099-R forms are submitted electronically, do not send form W-3.

    However, if you are permitted to make Federal submissions of these documents on paper, you may submit them to Delaware on paper as well. Paper W-2 and 1099-R submissions must include Delaware form W-3.

    FormDue
    Paper and online W-2sJanuary 31st
    Paper 1099sFebruary 28th
    Online 1099sMarch 31st

    Delaware does participate in the combined Federal/State 1099 filing program, but 1099-MISC and 1099-R information are required to be submitted directly to the Delaware Division of Revenue. 

    For further details, see the Division of Revenue Employer's Guide (Withholding Regulations and Employer's Duties).