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 All City of Wilmington residents or persons conducting business in the city are required to pay an Earned Income Tax, also known as the City Wage Tax.
Related to the Earned Income Tax is the Net Profits Tax. This applies to the net profit from self-employed businesses and professionals such as consultants, sole propietors, and LLC's.
The following frequently asked questions are provided to help you understand the City of Wilmington's Earned Income Tax. This information is also available in a downloadable flyer, The Earned Income Tax and You: A Taxpayer Advisory.
FREQUENTLY ASKED QUESTIONS ABOUT THE CITY'S EARNED INCOME/WAGE TAX
 Are you a resident of the City
of Wilmington?
All residents of the City of Wilmington are
subject to the Earned Income Tax. The tax
is payable on all earned income (whether
derived from wages or business income)
regardless of where it is you may work,
whether inside or outside the City.
Do you work or conduct business
in the City?
Any person who works in the City or conducts
business in the City from which he or she
derives wages or business income, is subject
to the City’s Earned Income Tax, regardless
of whether he or she lives inside the City or not.
How is the tax calculated?
The Earned Income Tax that is due is
calculated as the product of 1.25 percent
times the applicable wages or net profits on
business income of the taxpayer.
When is the Earned Income Tax
payable?
The Earned Income Tax is payable monthly
if the amount withheld is $50.00 or more. If
it is less than $50.00 per month, it is payable
quarterly. Net profits tax is an annual tax due
on April 15th each year.
Does an employer have a responsibility
to collect the Earned
Income Tax of its employees?
Yes. If the employer operates from within
the State of Delaware, it has a statutory
responsibility to collect and remit the tax to
the City. Failure to collect and remit the
Earned Income Tax as required subjects
the employer to joint liability for the tax, as
well as all accrued penalties, interest
and other charges.
What happens if a Taxpayer
doesn’t pay the
Earned Income Tax?
Failure to pay the tax on a timely basis subjects
the taxpayer to statutory penalties and
interest. If the taxpayer does not voluntarily
pay the tax and all assessments thereon, the
account will be referred to either or both a
third party collection agency or to an outside
law firm with authority to take such action as
may be necessary and appropriate to collect
the debt, including but not limited to filing
suit and executing on any judgment obtained
in connection therewith. In addition, the City
may elect to report the taxpayer’s Earned
Income Tax delinquency to one or more credit
reporting agencies.
Why does the City have an
Earned Income Tax?
The City uses the revenues from the Earned
Income Tax to fund, staff and administer
a myriad of City services that work to
strengthen neighborhoods and to promote
and sustain business activity and economic
development. By way of example, these revenues
help to equip, train and retain police
and firefighters, to sweep the streets and
pick up the trash, to enforce the correction of
licensing and inspection code violations, and
to promote City cultural and entertainment
venues like the Clifford Brown Jazz
Festival.
How do I find out more about
the Earned Income Tax?
If you would like more information about
the City’s Earned Income Tax or would
like to open an account to pay the tax,
please contact the Finance Department,
Earned Income Division, 6th Floor, Louis L.
Redding City/County Building, 800 French
Street, Wilmington, Delaware 19801 or call
(302) 576-2418. |
