An inheritance tax is charged to the person receiving property (as opposed to estate tax that is charged to the estate itself). The rate often depends on family relationships. Delaware chose to move away from that approach. Some supporters argued it was outdated. They wanted simpler rules and stronger competition with nearby states.
After the 1999 repeal, the state leaned on other tools. For years, Delaware used an estate tax instead. Later, Delaware repealed its estate tax too, effective January 1, 2018. Today, inheritance tax in Delaware is simple: the state doesn’t collect it.
So, if you’re searching for inheritance tax in Delaware, you’ll keep seeing the same answer: there isn’t one. Delaware once collected the tax, but it repealed the tax effective January 1, 1999.
A quick history of Delaware’s inheritance tax
Delaware’s inheritance tax used to live in state law. It applied when a person passed and property transferred to heirs. In 1998, lawmakers approved a repeal that kicked in at the start of 1999. A decade later, Delaware lawmakers brought back an estate tax. But they still didn’t revive the inheritance tax. That difference matters, because the taxes work in opposite directions.
Today, no inheritance tax doesn’t mean “no paperwork.” It means Delaware isn’t charging a separate state tax based on who inherits. Other taxes may still apply. Property taxes, income tax on some income, and federal estate tax for large estates can still come into play. For families looking to minimize estate costs and complexity, tools like living trusts can help assets transfer directly to beneficiaries while avoiding the probate process entirely.
Frequently asked questions
- Does the state have any inheritance tax today?
- No. Delaware does not currently impose an inheritance tax.
- Did Delaware really have one before 1999?
- Yes. It was repealed effective January 1, 1999.
- If there’s no inheritance tax, is everything tax-free?
- Not always. Federal rules can apply to large estates, and some income can be taxable to recipients.
(Read More: Learn about revocable trusts in Delaware versus Nevada.)