Delaware vs New Jersey: Taxes & Take-Home Pay 2026

A border with a lot of daily commuting

Many residents of Salem and Gloucester counties in New Jersey cross the Delaware Memorial Bridge to jobs in Wilmington and northern Delaware. People also compare the two when choosing where to buy: Delaware has no sales tax at all, while New Jersey has a 6.625% statewide rate.

There is no reciprocal agreement between Delaware and New Jersey. A New Jersey resident who works in Delaware files a Delaware nonresident return (Form PIT-NON) and then claims a credit on the New Jersey return.

How the income taxes compare

Delaware’s first $2,000 of taxable income is tax-free and its rates run from 2.2% to 6.6%, with the top rate starting at just $60,000. Every filing status uses the same brackets. The standard deduction is $3,250 single and $6,500 joint, and each personal exemption is a $110 credit.

New Jersey has no standard deduction, only a $1,000 exemption per filer and $1,500 per dependent, but its brackets are wide and its rates stay at 5.525% or below until $75,000 for single filers. As a result New Jersey’s income tax is usually lower than Delaware’s for middle-income households, while Delaware wins on sales tax.

Worked example: New Jersey resident working in Wilmington at $85,000

Take a single filer living in Pennsville who earns $85,000 at a Wilmington office. Estimates from the site’s engine:

• Delaware nonresident tax on the Delaware wages: about $4,269.
• City of Wilmington wage tax (1.25% on nonresidents who work in the city): about $1,063.
• New Jersey tax before credits: about $3,225. Schedule NJ-COJ gives a credit for the Delaware tax based on the share of income Delaware taxed, capped at the New Jersey tax. Here Delaware’s tax is higher, so the credit can eliminate the New Jersey tax on those wages.
• Approximate total state and local income tax: $5,332, compared with about $3,225 if the same person worked in New Jersey.

Payroll programs on each side

Delaware Paid Leave premiums are 0.8% of wages through 2026, and employers may deduct up to half (0.4%) from employees; claims have been payable since January 1, 2026. New Jersey withholds 0.425% for unemployment and workforce funds up to $44,800, plus 0.19% for disability and 0.23% for family leave insurance up to $171,100.

Retirement income

Neither state taxes Social Security. Delaware residents aged 60 or older can exclude up to $12,500 of pension and eligible retirement income, and filers 65 or older get an extra standard deduction. New Jersey’s exclusion is far larger for most retirees: up to $100,000 joint or $75,000 single for residents aged 62+, but only when total income is $150,000 or less. Take a couple, both 65 or older, living on Social Security and a $70,000 pension paid to one of them. In New Jersey the pension falls under the $100,000 exclusion, so they owe nothing. In Delaware, after the $12,500 exclusion, the standard deduction, the extra $2,500 each for age 65 and the personal and age-60 credits, they owe about $1,727. Delaware’s exclusion is per person, so a couple with two pensions could exclude up to $25,000.

Shopping, property tax and the year you move

• Sales tax: Delaware has none at state or local level; businesses pay a gross receipts tax instead.
• Property tax: New Jersey homeowners and tenants can deduct up to $15,000 of property tax on their main home or take a refundable credit. Delaware property taxes are set locally; compare actual bills.
• Moving: New Jersey has no separate part-year return; you file Form NJ-1040 for the resident months. Delaware nonresidents file Form PIT-NON.