(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 (2), 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. For taxable years beginning before January 1, 2022:
1. Amounts received, not to exceed $2,000, by persons under age 60 as pensions from employers, the United States, this State, or any subdivision of this State; or
2. Amounts received, not to exceed $12,500, by persons age 60 or older as pensions from employers, the United States, this State, or any subdivision of this State, or as eligible retirement income.
b. For taxable years beginning on or after January 1, 2022:
1. For persons under age 60, the greater of:
A. Amounts received, not to exceed $2,000, as pensions from employers, the United States, this State, or any subdivision of this State; or
B. Amounts received, not to exceed $12,500, as a United States military pension.
2. For persons age 60 or older, amounts received, not to exceed $12,500, as pensions from employers, the United States, this State, or any subdivision of this State, or as eligible retirement income.
c. For the purposes of this paragraph (b)(3):
1. A. “Eligible retirement income” includes 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.
B. For purposes of this paragraph (b)(3)c., eligible retirement income received by spouses as joint tenants with right of survivorship or as tenants by the entirety is deemed to have been received ½ by each.
2. “United States military pension” means a pension received as a result of an individual’s service in the Army, Navy, Air Force, Marine Corps, Space Force, Coast Guard, the commissioned corps of the National Oceanic and Atmospheric Administration, the commissioned corps of the Public Health Service, or the National Guard.
(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.
(10) The amount of any unemployment benefits received in calendar years 2020 and 2021, to the extent included in federal adjusted gross income.
(11) Any amount, up to a limit of $1,000, contributed by an individual during the taxable year to 1 or more accounts established and maintained pursuant to the DE529 Education Savings Plan as set forth in subchapter XII of Chapter 34 of Title 14, provided, however, that no deduction shall be permitted under this subsection for any amount contributed through:
a. A change in the designated beneficiary of; or
b. A transfer or rollover from
an account established and maintained pursuant to the DE529 Education Savings Plan as set forth in subchapter XII of Chapter 34 of Title 14; and provided further, that no deduction shall be permitted under this section for any amount contributed during the taxable year to an account in a Delaware sponsored tuition program for expenses intended or used for tuition in connection with enrollment or attendance at an elementary or secondary public, private, or religious school; and provided further, that no deduction shall be permitted under this subsection for any amount contributed during the taxable year for an individual, head of household, married filing separate combined, or married filing separate filer with a federal adjusted gross income greater than $100,000 or for joint filers, with a federal adjusted gross income greater than $200,000. For spouses filing a joint return with federal adjusted gross income not greater than $200,000, the amount of the subtraction shall be the amount contributed by the spouses, up to a limit of $2,000.
(12) Any amount, up to a limit of $5,000, contributed by an individual during the taxable year to 1 or more accounts established and maintained pursuant to the Delaware Achieving a Better Life Experience (ABLE) Program as set forth in Chapter 96A of Title 16; provided, however, that no deduction shall be permitted under this subsection for any amount contributed through:
a. A change in the designated beneficiary of; or
b. A transfer or rollover from
an account established and maintained pursuant to the Delaware Achieving a Better Life Experience Program as set forth in Chapter 96A of Title 16. For spouses filing a joint return, the amount of the subtraction shall be the amount contributed by the spouses, up to a limit of $10,000.
(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.
(d) To determine taxable income under this subchapter, an amount is added to or subtracted from the amount of federal taxable income for such year as computed for purposes of the federal income tax:
(1) For property acquired and placed in service after December 31, 2025, and before January 1, 2031, which would otherwise be eligible for expensing under § 70301 of P.L. 119-21, to continue the amortization and depreciation of such property under the United States Internal Revenue Code [26 U.S.C. § 1 et seq.] provisions in effect immediately before the enactment of § 70301 of P.L. 119-21, rather than under § 70301 of P.L. 119-21.
(2) For qualified production property, as defined in § 70307 of P.L. 119-21, acquired and placed in service after December 31, 2025, and before January 1, 2031, to continue the amortization and depreciation of such property under the United States Internal Revenue Code [26 U.S.C. § 1 et seq.] provisions in effect immediately before the enactment of § 70307 of P.L. 119-21, rather than under § 70307 of P.L. 119-21.