Delaware LLC Tax Filing Requirements (2026)

Fact-checked by the LegalGlass editorial team against primary sources · Published Aug 6, 2026 · Last updated Aug 6, 2026

A Delaware LLC must pay an annual franchise tax of $300 to the Delaware Division of Corporations by June 1 each year. Delaware does not impose state income tax on LLCs that do not conduct business in the state, but federal income tax obligations apply based on the LLC's IRS classification.

Overview of Delaware LLC Taxation

Delaware LLCs have distinct tax obligations at both the federal and state levels. Federally, the Internal Revenue Service (IRS) classifies LLCs by default as either a disregarded entity (for single-member LLCs) or a partnership (for multi-member LLCs). This means the LLC itself generally does not pay federal income tax; instead, profits and losses are "passed through" to the owners' personal tax returns. LLCs can also elect to be taxed as a corporation (C-corp) or S-corporation by filing specific IRS forms.

At the state level, Delaware imposes an annual franchise tax on all LLCs registered in the state, regardless of where they conduct business. This tax is a flat fee of $300. Crucially, Delaware does not levy state income tax on LLCs that do not conduct business within Delaware. However, if a Delaware LLC does engage in business activities within the state, it may be subject to Delaware state income tax and gross receipts tax, administered by the Delaware Division of Revenue.

Understanding these distinctions is vital for compliance. While many Delaware LLCs are formed by out-of-state owners who do not conduct business in Delaware, they still must meet the annual franchise tax requirement. For a general understanding of LLC taxation, see our guide on business tax.

Federal Tax Filing Requirements

The federal tax treatment of a Delaware LLC depends on its classification with the IRS. Most LLCs are considered "pass-through" entities for federal income tax purposes. This means the LLC itself does not pay federal income tax, but its profits and losses are reported on the owners' personal tax returns.

• Single-Member LLC (SMLLC): By default, an SMLLC is treated as a disregarded entity. This means the LLC's income and expenses are reported on the owner's personal tax return, typically on Schedule C (Form 1040) for sole proprietorships, Schedule E for rental income, or Schedule F for farm income. The owner also pays self-employment taxes (Social Security and Medicare) on their share of the profits.
• Multi-Member LLC: By default, a multi-member LLC is treated as a partnership. The LLC must file Form 1065, U.S. Return of Partnership Income, to report its income, gains, losses, deductions, and credits. Each member receives a Schedule K-1 (Form 1065), which reports their share of the LLC's income or loss, and they report this on their individual Form 1040. Members also pay self-employment taxes on their distributive share of the LLC's profits.
• S-Corporation Election: An LLC (single or multi-member) can elect to be taxed as an S-corporation by filing Form 2553, Election by a Small Business Corporation. An S-corp still operates as a pass-through entity, but owners who work for the business can be paid a reasonable salary, subject to payroll taxes, and any remaining profits distributed to them are generally not subject to self-employment taxes. The LLC files Form 1120-S, U.S. Income Tax Return for an S Corporation.
• C-Corporation Election: An LLC can elect to be taxed as a C-corporation by filing Form 8832, Entity Classification Election. In this case, the LLC becomes a separate taxable entity and pays corporate income tax on its profits using Form 1120, U.S. Corporation Income Tax Return. This can result in "double taxation" if profits are distributed to owners as dividends, which are then taxed again at the individual level.

Most Delaware LLCs will need a federal Employer Identification Number (EIN) from the IRS. An EIN is required for any LLC with employees, any multi-member LLC, or any LLC electing to be taxed as a corporation. A single-member LLC with no employees that is treated as a disregarded entity can use the owner's Social Security Number (SSN) but may still opt for an EIN for business purposes.

Delaware Annual Franchise Tax

All limited liability companies formed in Delaware are required to pay an annual franchise tax to the Delaware Division of Corporations. This is a mandatory fee for maintaining the LLC's good standing in the state, regardless of whether the LLC conducts any business in Delaware or elsewhere.

• Tax Amount: The annual franchise tax for a Delaware LLC is a flat fee of $300. This amount is fixed and does not vary based on the LLC's income or assets.
• Due Date: The annual franchise tax is due by June 1 of each year. This deadline applies to all Delaware LLCs, regardless of their formation date. If June 1 falls on a weekend or holiday, the due date typically shifts to the next business day.
• Payment Method: Payments are made directly to the Delaware Division of Corporations. The preferred method is online payment through the Delaware Division of Corporations website, using a credit card or ACH debit. There is no specific form to file for this payment; it is simply a direct payment.
• Penalties: Failure to pay the annual franchise tax by the June 1 due date will result in a penalty of $200, plus interest of 1.5% per month on the tax and penalty. Continued non-payment can lead to the LLC's forfeiture, meaning it loses its legal standing and ability to conduct business as an LLC in Delaware.

It is important to note that this annual franchise tax is distinct from any taxes or fees related to a Delaware registered agent, which is also a mandatory requirement for all Delaware LLCs. The registered agent fee is paid to the agent service provider, not the state.

Delaware State Income Tax

Delaware's state income tax rules for LLCs depend entirely on whether the LLC conducts business within the state. This is a critical distinction for many Delaware LLCs, as a significant number are formed by out-of-state individuals or entities that do not operate in Delaware.

• No Business in Delaware: If a Delaware LLC does not conduct any business within the state of Delaware, it is generally not subject to Delaware state income tax. This is a primary reason why many businesses choose to incorporate in Delaware even if their operations are elsewhere. The LLC's income will typically be taxed in the state(s) where it actually conducts business or where its owners reside.
• Conducting Business in Delaware: If a Delaware LLC does conduct business within the state, it may be subject to Delaware state income tax. The specific tax obligations will depend on the LLC's federal tax classification:
  • Disregarded Entity (SMLLC): The owner will report the Delaware-sourced income on their individual Delaware income tax return (Form 200-01).
  • Partnership (Multi-Member LLC): The LLC will file a Delaware Partnership Return (Form 300-I) and each partner will report their share of the Delaware-sourced income on their individual Delaware income tax return.
  • S-Corporation: The LLC will file a Delaware S-Corporation Income Tax Return (Form 1100S) and each shareholder will report their share of the Delaware-sourced income on their individual Delaware income tax return.
  • C-Corporation: The LLC will file a Delaware Corporation Income Tax Return (Form 1100) and pay corporate income tax directly to the state.

The Delaware Division of Revenue administers state income taxes. Tax rates for individuals and corporations vary. LLCs conducting business in Delaware should consult the Division of Revenue's guidelines and forms for specific filing requirements and due dates.

Delaware Gross Receipts Tax

In addition to state income tax, LLCs conducting business in Delaware may also be subject to the Delaware Gross Receipts Tax. This is a tax on the total gross revenues of a business, regardless of profitability, derived from activities within Delaware. It is not a sales tax but a tax on the privilege of doing business in the state.

• Applicability: The Gross Receipts Tax applies to businesses engaged in various activities, including manufacturing, wholesaling, retailing, services, and rentals, if those activities generate revenue within Delaware. There are specific exemptions and thresholds that may apply.
• Tax Rates: Rates vary significantly depending on the business activity (e.g., retail, wholesale, services) and can range from 0.096% to 1.92% of gross receipts. Businesses typically need to obtain a Delaware business license from the Division of Revenue to register for and pay this tax.
• Filing and Payment: The Gross Receipts Tax is generally filed and paid monthly or quarterly, depending on the amount of tax liability. Businesses must register with the Delaware Division of Revenue and file the appropriate forms (e.g., Form 5001 for monthly filers, Form 5002 for quarterly filers).

LLCs that have physical presence, employees, or conduct significant sales activities within Delaware should investigate their potential liability for the Gross Receipts Tax. This tax is administered by the Delaware Division of Revenue.

Other Potential Delaware Taxes and Filings

While the annual franchise tax is the primary state-level obligation for most Delaware LLCs not doing business in the state, other taxes and filings may apply depending on the LLC's activities and whether it has employees.

• Employer Withholding Tax: If a Delaware LLC has employees working in Delaware, it must register with the Delaware Division of Revenue for employer withholding tax. The LLC will be responsible for withholding state income tax from employee wages and remitting it to the state, typically on a monthly or quarterly basis using Form W1.
• Unemployment Insurance Tax: LLCs with employees in Delaware are also required to pay unemployment insurance taxes to the Delaware Department of Labor. This tax funds unemployment benefits for eligible workers. The LLC must register with the Department of Labor and file quarterly reports (Form UC-1).
• Sales Tax: Delaware is one of the few states that does not have a state sales tax. This means LLCs selling goods or services in Delaware do not need to collect or remit sales tax to the state. However, this does not exempt them from the Gross Receipts Tax if applicable.
• Local Taxes: While Delaware does not have a statewide sales tax, some local jurisdictions (cities or counties) may impose their own taxes or fees. LLCs should check with the specific municipality where they operate for any local tax obligations or business license requirements.

It is important for any Delaware LLC conducting business within the state to thoroughly research all applicable state and local tax requirements to ensure full compliance. The Delaware Division of Revenue website is the primary resource for state tax information and forms.

Frequently Asked Questions

What is the annual tax for a Delaware LLC?

A Delaware LLC must pay an annual franchise tax of $300 to the Delaware Division of Corporations. This tax is due by June 1 each year.

Does a Delaware LLC pay state income tax?

Delaware does not impose state income tax on LLCs that do not conduct business within the state. If the LLC does business in Delaware, it may be subject to state income tax and gross receipts tax.

What is the due date for Delaware LLC annual tax?

The $300 annual franchise tax for a Delaware LLC is due by June 1 each year. Payments are made online through the Delaware Division of Corporations website.

Does a Delaware LLC need an EIN?

Most Delaware LLCs need a federal Employer Identification Number (EIN) from the IRS. An EIN is required if the LLC has more than one member, has employees, or elects to be taxed as a corporation.

What is the difference between federal and state tax for an LLC?

Federal taxes for an LLC are paid to the IRS and include income tax (based on the LLC's federal tax classification), self-employment tax, and payroll taxes. State taxes for a Delaware LLC include the annual $300 franchise tax, and potentially state income tax or gross receipts tax if the LLC conducts business in Delaware.

Related

• How to form an LLC in Delaware
• Delaware registered agent requirements
• How to get an EIN
• Business tax overview
• S-Corp vs LLC
• How to dissolve an LLC
• How to form an LLC (cluster hub)

Sources

1. Delaware Division of Corporations - Delaware LLC Annual Tax ($300 annual tax, June 1 due date, penalties).
2. Delaware Division of Corporations - Fee Schedule (confirms $300 LLC annual tax).
3. Delaware Division of Revenue - Business Tax FAQs (state income tax, gross receipts tax, withholding).
4. Delaware Division of Revenue - Business Tax Forms (forms for income tax, gross receipts tax, withholding).
5. Delaware Division of Revenue - Business Tax Tips (guidance on various business taxes).
6. IRS - Limited Liability Company (LLC) (federal default classifications: disregarded entity, partnership).
7. IRS - Get an Employer Identification Number (EIN) (EIN requirements).
8. Cornell Law School Legal Information Institute - Disregarded Entity (definition).
9. Cornell Law School Legal Information Institute - Pass-Through Entity (definition).
10. Delaware Code Online - Title 6, Chapter 18: Limited Liability Company Act (governs LLC formation and operation).
11. Delaware Department of Labor - Unemployment Insurance Employer Information (UI tax requirements).
12. IRS - About Form 2553, Election by a Small Business Corporation (S-corp election).
13. IRS - About Form 8832, Entity Classification Election (C-corp election).
14. IRS - About Form 1065, U.S. Return of Partnership Income.
15. IRS - About Form 1120-S, U.S. Income Tax Return for an S Corporation.
16. IRS - About Form 1120, U.S. Corporation Income Tax Return.

LegalGlass provides general information for educational purposes and is not a law firm or a substitute for advice from a licensed attorney or tax professional. Laws, fees, and thresholds change; verify current requirements with the Delaware Division of Corporations and Delaware Division of Revenue before acting.