Delaware Withholding laws & compensation compliance analysis

Delaware Withholding: What you need to know

The Delaware income tax law requires that employers withhold state income tax from the wages of resident and nonresident employees. The definition of employer and employee is the same as for federal income tax purposes. An employer is any person or organization for whom an individual performs any services as an employee. It includes any person or organization paying wages to a former employee after termination of his employment. Delaware automatically incorporates changes to the federal Internal Revenue Code as they are enacted.
“Employee” defined. Everyone who performs services subject to the will and control of an employer, both as to what will be done and how it will be done, is an employee. It does not matter that the employer permits the employee considerable discretion and freedom of action, if the employer has legal right to control both the method and the result of the services.
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Withholding applies to compensation paid by employers to employees, including salary, bonus, vacation allowance, and commission. Delaware generally applies the same rules as federal law to determine which payments are subject to withholding.
Registration. Employers required to withhold state income taxes must register with the Division of Revenue and use their federal employer identification number for state tax accounts.
Deposits. Employers must report and remit withheld taxes either monthly, quarterly, or eight times a month depending on the amount withheld during the look-back period (July 1 to June 30 of the previous year).
Quarterly. Employers that withheld up to $3,600 during the look-back period must file quarterly using Form W-1Q.
Monthly. Employers that withheld ...

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