Delaware LLC Tax Increase 2026: What You Owe and When
Yes. Delaware raised its annual LLC tax from $300 to $400, and the Delaware LLC tax increase 2026 applies starting with the 2026 tax year. Delaware collects each year’s tax the following June. So for every LLC that existed at any point in 2026, the first payment at the new rate is due on or before June 1, 2027.
The change comes from House Bill 400, signed on May 21, 2026. The annual tax part of the law took effect retroactively on January 1, 2026. That is why a bill signed in May still covers all of 2026. You can read the enacted text on the Delaware General Assembly’s session laws page.
Who owes the higher tax?
Every LLC that appears as active in the State’s records at any time in a tax year owes it. According to the Division of Corporations’ LLC tax instructions, the tax applies if the entity was active at any point between January 1 and December 31, and it is never prorated.
- Delaware LLCs: owe the tax every year they exist, even if they had no revenue, no activity and no bank account.
- Out-of-state LLCs registered in Delaware: owe the same annual tax as a Delaware LLC.
- Limited partnerships and general partnerships: moved to the same new rate as LLCs.
- Series LLCs: each registered series owes its own annual tax, which rose from $75 to $100 per series. That is on top of the parent LLC’s tax.
- Delaware corporations: the law did not change their franchise tax rates. Corporations still file an annual report and pay franchise tax by March 1, as the Division of Corporations’ tax information page explains.
For the full picture of what an LLC owes each year, see our guide to the Delaware LLC franchise tax.
I formed my LLC in 2026. When is my first payment due?
On or before June 1, 2027. The payment due June 1, 2026 was for the 2025 tax year, which the new rate does not cover. An LLC formed in 2026 owed nothing that June. Its first bill is for 2026, at the higher rate, due the following June.
Because the tax is never prorated, your formation date matters. An LLC formed on December 15 owes the same full year’s tax as one formed on January 2.
Example: forming in December or January
Two founders plan similar businesses. Maya forms her LLC on December 15, 2026. Jordan forms his on January 4, 2027.
- Maya owes the 2026 tax by June 1, 2027, then the 2027 tax by June 1, 2028.
- Jordan owes nothing in 2027. His first payment, for 2027, is due June 1, 2028.
From 2028 on, they pay on the same schedule. The difference is that Maya pays one extra full year’s tax for about two weeks of 2026. That can still be the right call if she needs the company before year-end, for example to sign a contract, open a business bank account or start invoicing. If the timing could affect how your income is taxed, have a tax professional look at it.
Did House Bill 400 change anything else?
Yes. On August 1, 2026, a range of filing and service fees charged by the Division of Corporations went up. These include the maximum the State may charge for expedited service and the annual report fee for out-of-state corporations registered in Delaware. The Division’s fee page lists the current amounts.
If you’re budgeting for a new company, our full breakdown of Delaware LLC costs covers the one-time and yearly costs together.
Do I have to file a Delaware annual report or tax return for my LLC?
No annual report. Delaware LLCs file no annual report. The annual tax is a payment only, and it is not an income tax return. Our page on Delaware LLC annual report requirements explains what you do and don’t owe each year.
Whether you also need a Delaware state income tax filing depends on whether your business earns income in Delaware and how it is taxed, not on where it was formed. If your LLC operates in Delaware, ask a tax professional which Delaware returns apply.
Corporations follow a different rule. According to Delaware’s Division of Revenue, a Delaware corporation whose only activity in the state is keeping its registered office there does not have to file a Delaware corporate income tax return. It still owes the annual franchise tax.
Does my LLC have to file taxes by March 15?
Only if the IRS taxes it as a partnership or an S corporation and it uses the calendar year. According to the IRS business due-date guidance, those returns are generally due by the 15th day of the third month after the tax year ends. For a calendar year, that is March 15.
- Multi-member LLC (default): taxed as a partnership, so the federal return is due in March.
- Single-member LLC (default): the owner reports the business on their personal return, due April 15 for calendar-year taxpayers.
- LLC taxed as a C corporation: the return is generally due by the 15th day of the fourth month after the tax year ends.
The IRS explains these default classifications in its FAQ on business entities. Federal deadlines are separate from Delaware’s June 1 date. Delaware’s March 1 deadline applies to corporations, not LLCs.
What happens if I pay late or stop paying?
A late payment adds a $200 penalty, plus interest of 1.5% per month on both the tax and the penalty. An LLC with unpaid taxes also falls out of good standing. That can cause problems with banks, investors and other states. Our guide to Delaware good standing covers what that status means and how to restore it.
Not paying does not close your LLC. The Division of Corporations’ FAQ is direct about it: if you don’t formally close the entity, penalty and interest keep building. If you’re shutting down a company you no longer use, a formal dissolution filing is what stops the yearly bill. The tax still applies to any year in which the LLC was active, even for a day. IncReg handles Delaware dissolution filings, and revival filings for LLCs that have lapsed.
Expect more mail now that the rate has changed. The Division of Corporations warns that some official-looking letters about taxes and reports are deceptive. Be suspicious of any letter that doesn’t come from the State or your Delaware registered agent.
How much of my profit does the Delaware tax take?
None of it scales with profit. The annual tax is a flat amount, the same whether your LLC earns nothing or $100,000. How much of that $100,000 you keep depends on federal income tax, self-employment tax and your home state’s income tax, which change with your filing status and deductions. A tax professional can give you a real number for your situation.
Is a Delaware LLC still worth it with the higher tax?
For many founders, yes. Delaware’s LLC Act gives owners wide freedom to set their own rules in the operating agreement. Its business courts and body of case law are familiar to lawyers, banks and partners across the country. And the State asks for no annual report from LLCs.
It’s the wrong fit if your business will only operate in your home state. In that case you would have to register the Delaware LLC as an out-of-state company at home anyway. You’d then pay both states’ yearly costs and keep a registered agent in each. A local LLC formed in your home state is usually simpler and cheaper. And if you plan to raise venture capital, investors usually expect a Delaware C-Corp, not an LLC.
If Delaware does fit, our complete guide to forming a Delaware LLC covers the decisions to make before you file.
Does the increase work differently for owners outside the US?
No. Non-resident owners pay the same annual tax by the same June 1 date, and Delaware makes no distinction by residency.
What differs is the federal paperwork. Under IRS instructions, a single-member LLC owned by a foreign person generally files Form 5472, attached to a pro forma Form 1120. This applies for each year the LLC has reportable transactions with its owner, which can include the money used to form and fund it. Our guide to the Delaware LLC for non-US residents explains what that means for you.
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Have a question about your specific situation? Contact us. This article is for informational purposes only and does not constitute legal or tax advice.
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