Airbnb Host Taxes in Delaware - 2026 Guide

Updated for 2026 (Filing 2025 Taxes)

Tax Basics for Airbnb Hosts in Delaware

Delaware’s charming coastal towns and historic cities are attracting a growing number of visitors, making Airbnb hosting a popular income source. However, revenue generated through short-term rentals is subject to both federal and Delaware state income taxes, requiring careful record-keeping and understanding of applicable regulations.

Delaware State Tax Rules for Rental Income

As a resident of Delaware, a state income tax return is required regardless of the amount of Airbnb income earned. Delaware utilizes a graduated income tax system, meaning the tax rate increases as your income rises. For the 2025 tax year, the rates are expected to remain consistent with prior years, ranging from 0% to 6.6%. Airbnb income is generally considered business income, even if it appears passive, and must be reported on your Delaware income tax return. The primary form used for reporting self-employment income, including Airbnb hosting revenue, is Form 1040-ES, Delaware Estimated Tax Payment Coupon, and ultimately reported on Form 1040 when filing your annual return. Delaware also requires taxpayers to pay estimated taxes quarterly if they expect to owe $400 or more in state income tax. Failure to do so may result in penalties. It’s crucial to maintain detailed records of all income and expenses related to your Airbnb activity to accurately calculate your tax liability. Delaware does not currently have specific short-term rental taxes beyond the standard income tax, but local jurisdictions (cities or counties) may impose their own taxes or require registration. Hosts should check with their local government for any additional requirements. Resources for Delaware tax information can be found on the Delaware Division of Revenue website: https://revenue.delaware.gov/

The Critical Tax Question: Are You a Business or a Rental?

Determining whether your Airbnb activity constitutes a business or a passive rental is the most important tax question for a host, as it directly impacts whether you owe self-employment tax.

• Schedule E (Passive Rental Income): Most casual hosts report on Schedule E (Supplemental Income and Loss) and are exempt from Self-Employment Tax. This applies if you only provide basic lodging and cleaning between guests. Essentially, if you're simply making a space available for rent, this is likely passive.
• Schedule C (Active Business Income): However, if you provide "substantial services" – such as daily cleaning, providing meals, concierge services, or offering amenities comparable to a hotel – you report on Schedule C (Profit or Loss from Business) and must pay the 15.3% self-employment tax (Social Security and Medicare).

Top Tax Write-offs for Delaware Hosts

• Platform Fees: Fees charged by Airbnb, VRBO, and other platforms are fully deductible as business expenses.
• Mortgage Interest & Property Taxes: You can deduct the portion of your mortgage interest and property taxes that corresponds to the rental space and the period it was rented. If the property is used for both personal and rental purposes, you must allocate these expenses accordingly.
• Repairs, Maintenance & Cleaning: Deduct costs for fixing items in the rental property, professional cleaning services, and cleaning supplies. Routine maintenance is deductible; major improvements that increase the property's value are generally depreciated.
• Depreciation: A powerful but complex deduction that allows you to deduct a portion of the property's cost each year to account for wear and tear. Depreciation calculations can be intricate, and consulting a tax professional is often recommended.