Key figures
Delaware payables
2026, with sources
1099s go to Delaware directly
Delaware wants copies of Forms 1099-NEC and 1099-MISC issued to Delaware residents, wherever the work was done, and to nonresidents for work done in Delaware. The state participates in the Combined Federal/State Filing program, but not for those two forms: they are submitted to the Division of Revenue directly, on the federal due dates. Paper filing is allowed only for payers with 10 or fewer forms.
Classifying contractors
For unemployment insurance, Delaware law treats a worker as an employee unless the company shows all three parts of an ABC-style test: the worker is free from its control and direction, the work is outside its usual course of business or places of business, and the worker is customarily engaged in an independently established trade. The burden is on the company.
No use tax, but unclaimed property
With no sales or use tax, accounts payable in Delaware has no tax-on-purchases step. What it does have is unclaimed property: uncashed vendor checks and unapplied vendor credits are reportable, and for a Delaware corporation any such item without a known owner address is reported to Delaware.
An example
A Delaware C-corp whose team works in New York pays a freelance designer who lives in Dover $8,000 in 2026. It files the 1099-NEC with the IRS as usual and, separately, sends the same information to the Division of Revenue, because the payee is a Delaware resident. A contractor living and working in New Jersey generates no Delaware filing at all, even though the company is a Delaware corporation: the test is where the payee lives or works, not where the payer is incorporated.
Invoices from Delaware vendors carry no sales tax line. Delaware’s gross receipts tax is the vendor’s own cost, not a tax passed to the buyer, so there is nothing to accrue or reclaim on a Delaware purchase.
The federal baseline
This page covers what Delaware adds. The federal rules underneath it apply here too.
Common questions
Do we file 1099-NECs with Delaware?
Yes, if the contractor lives in Delaware or did the work in Delaware. Delaware participates in the Combined Federal/State Filing program, but the Division of Revenue says 1099-NEC and 1099-MISC information must be submitted to it directly, on the federal due dates.
Do we owe use tax on software we buy?
No. Delaware has no sales tax and no use tax, so there is nothing to self-assess on software or equipment bought from out-of-state vendors.
Payables next door
- MDMaryland payablesMaryland wants 1099s only when Maryland tax was withheld, classifies workers for unemployment with the ABC test, and since July 2025 taxes the software and IT services a company buys.
- NJNew Jersey payablesNew Jersey classifies workers with the ABC test, wants contractors reported like new hires, and wants 1099s of $1,000 or more filed electronically by February 15.
- PAPennsylvania payablesPennsylvania wants 1099s by January 31 and 3.07% withheld from Pennsylvania-source payments of $5,000 or more to nonresident contractors. Because SaaS is taxable, use tax on software is a real payables item.
Founder guides on this
- PeopleContractor or employee? Classification for startupsContractor or employee depends on control, not the contract. The IRS test, state rules, 1099s, payroll registration and the cost of getting it wrong.
- ComplianceFirst-year compliance calendar for a Delaware C-corpDelaware franchise tax, 1099s, the federal return, payroll filings, state annual reports and sales tax: the deadlines a young C-corp misses most, by month.
More of the Delaware guide
- AccountingAccounting and state tax in DelawareCorporate tax, conformity to federal rules, apportionment and what it does to your books
- ReceivablesReceivables and sales tax in DelawareSales tax registration, economic nexus, whether SaaS is taxable, and collecting from customers
- PayrollPayroll taxes and employer rules in DelawareWithholding, unemployment insurance, paid leave, minimum wage and the rules on paydays
- ComplianceCompliance and filings in DelawareRegistering to do business, annual reports, franchise tax and the filing calendar
- AdvisoryAdvisory: credits and decisions in DelawareCredits, incentives and the decisions that are cheaper to get right the first time
Sources
Checked against each agency’s own page on . Rates and thresholds change, usually on January 1.
General information for US companies, not tax, legal or accounting advice for yours. Rules and thresholds change; confirm the specifics with a CPA or the agency before you act on them.