2019 Delaware Code
Title 30 - State Taxes
Chapter 11. Personal Income Tax
Subchapter II Resident Individuals
§ 1106 Modifications.
(a) Additions. — There shall be added to federal adjusted gross income:
(1) a. Interest qualifying under § 103 of the United States Internal Revenue Code of 1986 [26 U.S.C. § 103] or any similar statute, other than interest on obligations and securities of this State and its political subdivisions and authorities; and
b. Dividends paid by a regulated investment company (sometimes referred to as a mutual fund) qualifying under § 852(b)(5) of the United States Internal Revenue Code of 1986 [26 U.S.C. § 852(b)(5)] or any similar statute;
provided, that dividends attributable to interest on obligations and securities of this State and its political subdivisions and authorities may be excluded from such addition if the amount of interest attributable thereto is reported in writing to the holder or owner of the shares or units of the regulated investment company by or on behalf of the manager of the regulated investment company, and such report states the dollar amount or percentage of Delaware and non-Delaware dividends pertaining to the taxpayer;
(2) The amount of any deduction for depletion of oil and gas wells allowed under § 611 of the Federal Internal Revenue Code of 1986 [26 U.S.C. § 611] to the extent such deduction is determined by reference to § 613 of the Federal Internal Revenue Code [26 U.S.C. § 613] (relating to percentage depletion);
(3) Any deduction, to the extent such deduction exceeds $30,000, for a net operating loss carryback as provided for in § 172 of the Internal Revenue Code or successor provisions.
(b) Subtractions. — There shall be subtracted from federal adjusted gross income:
(1) a. Interest on obligations of the United States and its territories and possessions, or of any authority, commission or instrumentality of the United States, to the extent includable in gross income for federal income tax purposes, but exempt from state income taxes under the laws of the United States; and
b. Dividends paid by a regulated investment company (as defined in § 851 of the United States Internal Revenue Code of 1986 [26 U.S.C. § 851], or any similar statute, sometimes referred to as a mutual fund) to the extent such dividends are attributable to interest paid on obligations of the United States and its territories and possessions, or of any authority, commission or instrumentality of the United States, which interest would be subject to subtraction from federal adjusted gross income under paragraph (b)(1)a. of this section if such obligations were owned directly by an individual and the interest on them were paid to such individual. The portion of the dividends of a regulated investment company which represents United States government interest which is exempt from state income taxes under this subparagraph shall be as reported in writing to the holder or owner of the share or units of the regulated investment company by or on behalf of the manager of the regulated investment company, and such report shall state the dollar amount or percentage of exempt and nonexempt dividends pertaining to the taxpayer;
(2) The amount of $2,000 by any person who has a total and permanent disability or by a person who is over 60 years of age, and (i) whose earned income in the taxable year is less than $2,500 and (ii) whose adjusted gross income (without reduction by this exclusion) does not exceed $10,000.
For purposes of this paragraph, in the case of spouses filing a joint return, the amount of the exclusion shall be $4,000 if (i) both are either over 60 years of age or have total and permanent disabilities or 1 is over 60 years of age and the other has a total and permanent disability and (ii) their total earned income in the taxable year is less than $5,000 and their adjusted gross income does not exceed $20,000;
(3) a. Amounts received as pensions by persons under age 60 from employers, the United States, the State or any subdivision thereof, not to exceed $2,000. For taxable years beginning on or after January 1, 1987, amounts received as pensions by persons age 60 or older from employers, the United States, the State or any subdivision thereof, not to exceed $3,000;
b. 1. Amounts not to exceed $2,000 received by persons under age 60 as pensions from employers, the United States, the State or any subdivision, or
2. (A) Amounts not to exceed $12,500 received by persons age 60 or older as pensions from employers, the United States, the State or any subdivision or as eligible retirement income.
(B) For the purposes of this paragraph, “eligible retirement income” shall include distributions received from qualified retirement plans defined in § 4974 of the federal Internal Revenue Code (“IRC”) [26 U.S.C. § 4974] or a successor provision, cash or deferred arrangements described in IRC § 401(k) [26 U.S.C. § 401(k)] or a successor provision, government deferred compensation plans described in IRC § 457 [26 U.S.C. § 457] or a successor provision, dividends, capital gains, interest and rental income from real property less deductible rental expenses. For purposes of this paragraph, eligible retirement income received by spouses as joint tenants with right of survivorship or as tenants by the entirety shall be deemed to have been received one-half by each;
(4) Social Security benefits paid by the United States and all payments received under the Railroad Retirement Act of 1974 [45 U.S.C. §§ 231-231[v] to the extent included in federal adjusted gross income;
(5) An amount equal to the portion of the wages paid or incurred for the taxable year which is disallowed as a deduction for federal tax purposes under § 280C, Internal Revenue Code [26 U.S.C. § 280C], relating to portion of wages for which the new jobs tax credit is claimed;
(6) Benefits received by a resident individual through participation in a travelink program certified by the Delaware Department of Transportation to the extent such benefits are included in the federal adjusted gross income of the taxpayer;
(7) Any deduction, consistent with the operation of § 172 of the Internal Revenue Code [26 U.S.C. § 172] or successor provision, to carry forward losses which were carried back in calculating federal taxable income but which were prevented from being carried back under paragraph (a)(3) of this section;
(8) a. Distributions received from qualified retirement plans as defined in § 4974 of the Internal Revenue Code (I.R.C.) [26 U.S.C. § 4974], cash or deferred arrangements described in § 401(k) of the I.R.C. [26 U.S.C. § 401(k)], and governmental deferred compensation plans described in § 457 of the I.R.C. [26 U.S.C. § 457], to the extent such distributions are applied within the tax year of the distributions for books, tuition or fees at an institution of higher education attended by the person or by any of the person’s dependents who have not attained the age of 26, so long as such amounts received have been included in the person’s federal adjusted gross income.
b. For the purposes of this section, an institution of higher education is a school which:
1. Admits as regular students only individuals having a certificate of graduation from a high school or the recognized equivalent of such a certificate;
2. Is legally authorized in this or another state to provide a program of education beyond high school; and
3. Provides an educational program for which it awards a bachelor’s or higher degree or provides a program which is acceptable for full credit toward such a degree, a program of postgraduate or postdoctoral studies or a program of training to prepare students for gainful employment in a recognized occupation.
(9) The amount of any refund of Delaware State income taxes imposed under this chapter, to the extent included in federal adjusted gross income for the tax period.
(c) Fiduciary adjustment. — There shall be added to, or subtracted from, federal adjusted gross income, as the case may be, the taxpayer’s share of the fiduciary adjustment determined under § 1634 of this title.
30 Del. C. 1953, § 1106; 57 Del. Laws, c. 737, § 1; 58 Del. Laws, c. 318; 58 Del. Laws, c. 342, § 1; 58 Del. Laws, c. 551, § 1; 59 Del. Laws, c. 151, § 1; 60 Del. Laws, c. 18, § 1; 60 Del. Laws, c. 269, § 1; 60 Del. Laws, c. 270, § 1; 60 Del. Laws, c. 639, § 1; 61 Del. Laws, c. 202, § 1; 61 Del. Laws, c. 298, § 1; 62 Del. Laws, c. 353, § 2; 64 Del. Laws, c. 224, § 1; 64 Del. Laws, c. 470, § 1; 65 Del. Laws, c. 203, § 1; 67 Del. Laws, c. 160, § 2; 67 Del. Laws, c. 263, §§ 3, 4; 67 Del. Laws, c. 399, §§ 1, 2; 67 Del. Laws, c. 408, § 2; 70 Del. Laws, c. 186, § 1; 70 Del. Laws, c. 495, § 1; 71 Del. Laws, c. 131, § 1; 71 Del. Laws, c. 352, §§ 1, 2; 72 Del. Laws, 1st Sp. Sess., c. 243, § 1; 72 Del. Laws, 1st Sp. Sess., c. 246, § 1; 74 Del. Laws, c. 138, § 1; 78 Del. Laws, c. 179, §§ 320-322.
