Delaware Corporate Franchise Tax Report Deadline Approaches

Corporations legally incorporated in Delaware have a franchise tax and annual return due March 1, 2022. The return must be filed online. This particular tax does not apply to legal persons other than companies, that is to say, LLC, LLP, etc., or corporations incorporated outside of Delaware. The tax applies to corporations taxed as a C corporation or an S corporation for federal income tax purposes.

Exemptions may also apply. Notably, corporations legally incorporated in Delaware that are exempt from federal income tax under Section 501(c) of the Internal Revenue Code are not required to pay franchise tax but must still file a report. annual.

The amount of tax due may vary depending on the number of shares issued and/or authorized by the company. There is a minimum fee of $175 and a minimum application fee of $50; thus, there is a Delaware minimum franchise tax and annual report payment total of $225 per year for Delaware domestic corporations.

There is a $200 penalty if you miss the filing deadline and 1.5% interest per month on the amount owed. Failure to file may also result in suspension of the corporation’s status in Delaware, which may prevent the taxpayer from engaging in future transactions.

If you or your client would like assistance in completing and paying the Franchise Tax and Annual Report, please contact your BKD Trusted Advisor™ in our State & Local Tax Services group or submit the Contact Us form below.

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