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Delaware tax tidbit: estate tax is back

April 4, 2010

Delaware flag Congress failed to take action on the federal estate tax last year, but Delaware lawmakers had no such trouble.

In what most observers called a surprisingly quick response to the state's budget crisis, Delaware reinstated its estate tax.

The legislation reauthorizing the tax was introduced in the Delaware House of
Representatives on June 29, 2009, and passed the same day. It cleared the state Senate the next day and was signed by the governor on July 1, 2009.

Now estates of Delaware residents who die on and after the July signing date are subject to the tax.

The First State had not had a separate estate tax since the enactment of the federal Economic Growth and Tax Relief Act of 2001 with its phase-out of the federal state tax credit. The credit disappeared completely in 2005, meaning that year any states that did not decouple from the federal estate tax system lost their estate
tax revenue.

With the new law, Delaware's estate tax is calculated using the rate schedule for state tax credits that were available under federal law in 2001 before the phaseouts began. The tax now applies to estates of $3.5 million or more. 

Details on the tax can be found in Form 900-R.

Tax trip around the
United States:
This post is part of our series
highlighting tax information from the 50 U.S. states and Washington,
D.C.
You can read other state tax
blurbs at our Complete menu of tasty state tax tidbits.

The State Tax Departments page
provides links to official state and District of Columbia revenue Web
sites so that you can find out more about your home's tax laws and
filing requirements.

As
we work through the 2010 tax season, a different state will be featured
each day as noted in Don't forget your state taxes! Check back to see
what tax tidbit we share about your home.

Related posts:

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