If you did not pay enough Delaware state income tax throughout the year, you may owe an underpayment penalty. Delaware uses Form PIT-UND (Underpayment of Estimated Taxes) to determine whether a penalty applies and, if so, calculate the amount owed.
What Is an Underpayment of Estimated Taxes?
Delaware income tax is generally expected to be paid as income is earned. This can be done through:
- Tax withholding from wages, pensions, or other income
- Quarterly estimated tax payments
- Certain payments made on your behalf, such as S corporation payments
If you do not pay enough tax during the year, Delaware may assess an underpayment penalty even if you pay your full tax balance when filing your return.
Who May Owe an Underpayment Penalty?
You may owe an underpayment penalty if your Delaware withholding, estimated tax payments, S corporation payments, and certain refundable credits did not did not total at least the smaller of:
- 90% of your current year Delaware tax liability, or
- 100% of your prior year Delaware tax liability.
If your prior year Delaware Adjusted Gross Income (AGI) exceeded $150,000 ($75,000 if Married Filing Separately), use 110% of your prior year Delaware tax liability when determining your required annual payment.
The Delaware Division of Revenue uses Form PIT-UND to determine whether a penalty is due based on the timing and amount of your tax payments throughout the year.
Are there Exceptions to the Penalty?
- You had no Delaware tax liability for the prior tax year.
- After reducing your required annual payment by Delaware withholding, the remaining amount is $800 or less.
- Certain taxpayers, including some part-year residents and taxpayers eligible for penalty relief under Delaware rules, may qualify for a waiver of the underpayment penalty.
- You derived at least 2/3 of your Gross Income from farming or fishing, and paid the total estimated tax due by January 15, 2026, or filed your return by March 1, 2026 AND paid the total tax due at that time.
Use the Form PIT-UND instructions for complete information.
Program Entry
To complete Form PIT-UND, go to:
- State
- Edit Delaware using the three dots
- Miscellaneous Forms
- Underpayment of Estimated Taxes, Form PIT-UND
You may need to manually enter your prior year Delaware tax liability information to allow the software to calculate the required annual payment and any applicable underpayment penalty. If the underpayment was paid before the return due date, enter the number of days between the payment date and the return due date as instructed by the software. The penalty calculation is based in part on when the underpayment was satisfied.
Important
- Form PIT-UND is used to calculate an underpayment penalty, not additional tax.
- Paying your tax balance when you file will not eliminate an underpayment penalty if tax payments were not made timely during the year.
- Keep records of all Delaware tax payments in case the Division of Revenue requests supporting documentation.
- Underpayment penalties are generally calculated separately for each estimated tax installment period. Paying additional tax later in the year may not eliminate a penalty that accrued for an earlier quarter.
Note: Most taxpayers who have adequate withholding throughout the year will not need to take any additional action regarding Form PIT-UND.