Time is running out to pay the Delaware franchise tax: the annual deadline is March 1. If you still need to take care of yours, don’t lose hope: the process is actually pretty simple.
The Delaware franchise tax must be paid by all companies that are incorporated in Delaware, regardless of whether or not you’ve generated any revenue or profit (technically, this filing is the “franchise tax and annual report”).
This means it’s easy to determine if you owe this tax: if your company is incorporated in Delaware, then yes, you need to pay the Delaware franchise tax.
If you have a tax preparer, they might do this for you— – it’s a good idea to ask, and many will handle it free of charge (Pilot Tax, for example, will take care of this for you).
If you don’t have a tax preparer (or if it’s too last-minute for them to help you with this), here’s how to handle it yourself. The process might look intimidating, but it’s actually pretty straightforward, and we’ll walk you through the trickiest parts.
Visit Delaware’s website for paying the tax: https://corp.delaware.gov/paytaxes/
Click on Pay Taxes / File Annual Report and enter your information as prompted (if you don’t know your “File number,” search for your company here). Then, click on “file annual report.”
You will most likely see a very large “amount due,” possibly in the tens of thousands of dollars. Don’t panic! There are two methods to calculate the amount of tax you owe, and you can use whichever one is lower. Those methods are:
You can learn more about the calculation methods on Delaware’s franchise tax website.
Input the rest of your information. Some key pointers:
Pay your taxes! Once you have the amount that you owe, you’ll be able to pay it through the website. For early-stage startups, we expect this amount to be around $400, plus a $50 filing fee.
It’s important to pay on time to remain in good standing with the state of Delaware, and avoid potential problems down the line.
Yes – there are a number of Delaware Franchise Tax filing providers who can do these steps on your behalf. However, you’ll need to provide them all the same information we discussed above – which means you’ll still have to do the work of finding and assembling it. For nearly the same effort, you can then simply file the tax yourself, and save on provider service fees.
If you have a full-service tax provider, they may take care of this for you at no additional fee (for example, Pilot Tax subscribers have Delaware franchise tax filings included in their service).
Once you’ve filed your Delaware franchise tax, you’re good for another year – but you might not be done thinking about taxes just yet. The federal corporate income tax deadline is fast approaching. If you don’t have a tax preparer, don’t wait until the last minute! Get tax help now, to avoid scrambling at the deadline.
Still have questions about the Delaware franchise tax? We’re always happy to help.
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