What type of income can I subtract from my Delaware return?

Below is a list of income that Delaware will allow you to subtract from your income:

Adjustments to Interest Received on U.S. Obligations 

Interest received on U.S. obligations is exempt from Delaware taxes. This entry is located under the additions to income (state section)  and allows you to enter a negative amount. 

Pension Income Exclusion

Amounts you received as pensions from employers may qualify for an exclusion from Delaware taxable income.

You may not claim this exclusion if:

• the distribution was an early distribution from an IRA or pension due to emergency reasons or a separation notice
• the distribution code in Box 7 is listed as "1"
• you were assessed an early withdrawal penalty on 1040 Schedule 1 line 18
• you have disability pension income reported as wages

Each spouse may claim only one exclusion. 

• If you were under age 60, your exclusion amount would be equal to $2,000 or the amount of your pension, whichever is less.
• If you were age 60 or older, your exclusion amount is calculated by using the chart here.

Delaware State Tax Refund, Fiduciary 

State refunds from Delaware may be excluded if they are included in the federal adjusted gross income. 

Any net subtractions from fiduciary adjustments obtained from income showed on a K-1 from a trust or estate should be included on the line applicable to this subtraction.

Social Security and Railroad Benefits

Social Security and Railroad benefits ARE NOT taxable in Delaware and SHOULD NOT be included in your Delaware taxable income.

Program Entry

1. State Section
2.  Edit
3. Subtractions to Income

For more information, click here.