State guide · Delaware · 2026 rules
S corporation in Delaware: what the election changes
Delaware adds little at the state level. In Wilmington the election moves the city tax from your profit to your salary.
Choose a state and enter your profit and salary to see the comparison.
The state
Delaware exempts a federal S corporation from its 8.7% corporation income tax, with no state election form. You pay personal income tax on the profit, as you do today. Delaware has no pass-through entity tax.
A Delaware LLC pays a flat $400 annual tax, due June 1, and files no annual report. An LLC that elects stays an LLC, so this does not change. A Delaware corporation pays franchise tax instead (at least $175) plus a $50 annual report fee, due March 1.
Payroll taxes on your salary
Unemployment insurance: 1.0% for a new employer on the first $14,500 of wages in 2026, plus a 0.11% training assessment on the same wages. Any officer of a corporation is covered.
Delaware Paid Leave does not apply to employers with nine or fewer employees, so a one-owner S corporation owes nothing unless it opts in.
Wilmington
Today a sole proprietor who lives or works in Wilmington pays the city’s 1.25% net profits tax on business profit. A single-member LLC is taxed the same way.
Corporations do not pay the net profits tax. After the election the S corporation withholds the 1.25% wage tax from your salary, and the profit beyond your salary is not taxed by the city. The city’s head tax starts only above five employees.
Worked examples
A single-member LLC owner, single filer, 22% federal bracket, default payroll and return costs. The figure is total tax and added costs as an S corporation compared with staying as you are.
| Profit / salary | No local tax | Wilmington (1.25%) |
|---|---|---|
| $80,000 / $45,000 | $802 lower | $1,240 lower |
| $120,000 / $60,000 | $3,204 lower | $3,954 lower |
| $200,000 / $90,000 | $7,984 lower | $9,359 lower |
Starting payroll in Delaware
Register for state withholding with the Division of Revenue through Delaware One Stop, and for unemployment insurance with the Division of Unemployment Insurance.
Other states
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- Washington, DC
- West Virginia
- Wisconsin
- Wyoming
Sources
- 30 Del. C. §1902(b)(9)
- Delaware Division of Corporations, LLC/LP/GP Tax Instructions
- Delaware Division of Corporations, Annual Report and Tax Information
- Delaware DOL, Division of Unemployment Insurance, Employer Services
- 19 Del. C. §3302(14)(A)(i)
- 19 Del. C. §3348(n), as amended by 84 Del. Laws c. 365
- 19 Del. C. §3401(a) (training special assessment)
- Delaware DOL, Delaware Paid Leave (coverage table)
- Delaware DOL, Delaware Paid Leave Program Overview FAQs v5
- City of Wilmington, Earned Income Tax Regulations (rev. 5/25/2023), §220(A)
- City of Wilmington, 2025 Net Profits Tax Return WCWT-6
- City of Wilmington, Doing Business in the City of Wilmington
Federal figures: IRS Publication 15 (2026), Schedule SE and Form 2553 instructions. Every figure was read on an official page and checked a second time. Checked October 24, 2026. How we check facts.