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.
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 4 Line 59
- 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.
Taxable Social Security Benefits/RR Benefits
Social Security and Railroad benefits ARE NOT taxable in Delaware and SHOULD NOT be included in your Delaware taxable income.
You can enter these subtractions within your account by following the steps below:
- State Section
- Subtractions to Income
For more information, click here.