Delaware tips tax calculator: a deduction that stalled
Delaware’s Division of Revenue says the OBBBA tips deduction “will not flow through to the Delaware Personal Income Tax,” and the state’s own $15,000 tips deduction bill left committee in June 2026 but never passed.
What the Tipped Worker Tax Relief Act would have done
House Substitute 1 for HB 386 proposed a Delaware deduction of up to $15,000 of cash gratuities for taxable years 2027 through 2029, limited to direct-service workers such as servers, bartenders, barbers and nail-salon staff. It would have phased out between $75,000 and $100,000 of modified AGI ($150,000–$200,000 joint) and turned into a refundable credit for filers under $40,000 ($80,000 joint). The bill was voted out of committee on June 17, 2026 and stopped there.
Delaware figures
| Cash wage / minimum | $2.23 / $15.00 |
|---|---|
| In force | July 1, 2026 |
| Next change | none scheduled |
| Tipped threshold | More than $30 a month in tips |
| Tips on the 2025 return | tips stay taxable in this state. Division of Revenue: “OBBBA deductions for no tax on tips … will not flow through to the Delaware Personal Income Tax.” Source: Delaware Division of Revenue |
| Tips on the 2026 return | tips stay taxable in this state. HS 1 for HB 386 (a $15,000 state tips deduction from 2027) was voted out of committee June 17, 2026 but not passed before the session ended. Source: Delaware General Assembly |
Delaware’s tipped wage
Delaware requires a $2.23 cash wage — ten cents above the federal floor — against a $15.00 minimum, a $12.77 tip credit. The minimum is not indexed, so both figures stay put until the General Assembly acts. A worker counts as tipped above $30 a month in tips.
A Rehoboth Beach summer
A seasonal server with $12,000 of tips and $9,000 of other income deducts $12,000 and saves $490 federally — the deduction wipes out all federal taxable income, so it is worth less than its face value. Delaware taxes the tips. In a 40-hour week, $2.23 an hour plus $380 of tips falls $131 short of $600, owed by the employer.
Check a Delaware workweek against the $15.00 minimum
Where these figures come from
- Delaware Division of Revenue · Delaware Department of Labor, Office of Labor Law Enforcement
- Tax Season Updates (2026)
- House Substitute 1 for House Bill 386 (Tipped Worker Tax Relief Act of 2026) — bill status (2026-06-17)
- Minimum Wages for Tipped Employees (table by state) (2026-07-01)
Federal rules: how the deduction works. Nearby: Maryland, Pennsylvania, New Jersey.
Figures verified against primary sources on