What are the applicable interest and penalty rates for underpayments of Delaware Income Tax?
A. The interest and penalty rates for underpayment of Delaware Income Tax are as follows: Interest – The Delaware Code imposes interest on any underpayment or late payment of income taxes due at the rate of ½% per month, or fraction of a month, on any tax due, from the due date of the return to the date paid. Penalty – Late Filing – The Delaware Code imposes penalties on any late filing of a balance due return at the rate of 5% per month up to a maximum of 50%. Penalty – Failure to Pay – The law provides for a penalty of 1% per month (not to exceed 25%) on any unpaid balance, for the failure to pay the tax liability due on a timely filed return. Penalty – Failure to File/Pay Estimated Taxes -The law provides a penalty of 1½% per month of the computed tax payment for failure to file/pay estimated taxes due. This penalty is in addition to those penalties and interest listed above. The penalty is also assessed if the estimated payment is filed late.
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