Delaware Franchise Tax Calculator

This calculator is designed to estimate your Delaware franchise tax.

Use Tax Calculator

Vanessa Kruze, CPA Kruze Consulting

Vanessa KruzeCPA
Kruze Consulting

If you incorporated in Delaware, you need to pay a Delaware Franchise Tax. The calculator below will help you estimate how much you’ll need to pay. The deadline is typically the last day of February - scroll down to access links to visit the Delaware Division of Corporations webpage where you can pay.

Caveat: The information on this page intended as general guidance for startups and it doesn’t substitute the need to work with a professional.
Your company is unique; contact Kruze Consulting.

Delaware Franchise Tax Calculator Form

Enter Each Class of Authorized Shares and Their par Value

Answers to Frequently Asked Questions

Do I need to file Delaware Franchise Tax?

If you incorporated in Delaware, yes, you need to file and pay the Delaware Franchise Tax.

When do I need to file the Delaware Franchise Tax?

February 28th of every year.

Where should I file the DE Franchise Tax?

Where should I file the DE Franchise Tax?

What Method Should I Use?

The vast majority of our startups use the Assumed Par Value Capital Method because it results it significantly less tax.

How much should I expect to pay?

Most of our startups pay between $400 - $10,000 in DE Franchise taxes. If you've received a bill for $75K, its because Delaware has calculated the tax using the Authorized Shares Method. Don’t freak out; recalculate using the Assumed Par Value Capital Method.

How much should I expect to pay?

What is par value?

Par value is the value per share. From the cap tables we've seen, the par value is usually set at $0.0001 or $0.00001. The par value has no connection to the market value of the share of stock.

What date should I use to value the Gross Assets?

12/31/XX (most often)

Why Delaware Incorporation is Important to VCs?

We often get the question, “why should my startup consider incorporating out-of-state and become a Delaware C-corp?”. Here are a few reasons why you would want to initially incorporate in Delaware.

Reasons Venture Capitalists Want Delaware C-Corps:

  • A C-Corp structure retains the profits and losses at the C-Corp level. It is not a pass-through entity like LLCs or S-Corps where the profits or losses get passed through to investors, C-Corps C-Corps are friendly with the venture capitalists’ tax structure.
  • There is a ton of litigation and VCs tend to understand what the rules are in Delaware
  • Most importantly, venture capitalists would usually rather fund a Delaware C-Corp and will tell you to switch as soon as they invest in your company.

There are many things you must do after becoming a Delaware C-Corp. Click here to learn more.

Becoming a Delaware C-Corp is simple, but there is a lot of legwork. Our experts here at Kruze are happy to do it for you. Also at Kruze, another option is working with a PEO; that is how you "Incorporate in a state." Hope that helps, thanks.

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