August 20, 2021
On July 31, 2021, the governor signed H.B. 171 bringing Delaware into conformity with the Federal NOL limitation which limits the net operating loss deductions that a corporate taxpayer may claim on their Delaware tax return. Under this law, a corporate taxpayer may claim a net operating loss deduction up to the amount claimed on their federal income tax return. Similarly, Delaware applies the Internal Revenue Code’s 80% of taxable income limit for tax years beginning after tax year 2020. Any excess net operating loss will be disallowed and will not be permitted to be used in the calculation of their Delaware corporate income tax. However, Delaware allows for unlimited carryforward of the disallowed NOL.
August 13, 2021
Delaware law requires withholding of the estimated tax due on the gain recognized from the sale of real estate if the seller is a nonresident individual, and the tax return must be submitted with recording of the deed. Effective July 30, 202, HB 171 requires such withholding from the net sale proceeds, and to the extent sale proceeds are not available, the recorder of deeds may accept a deed without payment of the tax if the closing attorney confirms that no funds are available for payment and that no funds were distributed to the seller.
March 23, 2021
The Delaware Division of Revenue (Division) will grant filing and payment extensions similar to those granted by the IRS in IR 2021-59. Delaware personal income tax returns, including composite returns, that would be due on April 30, 2021 will now be due on May 17, 2021. If a taxpayer needs additional time beyond the extended due date to file a return, taxpayers may request an extension for additional time to file through the Division’s online system, https://dorweb.revenue.delaware.gov/scripts/olp/olp.dll/pitext , which will provide an automatic extension of time to file to October 15, 2021. To submit a request for extension on paper, taxpayers should use Form 1027, available at https://revenuefiles.delaware.gov/2019/TY20_200EXe.pdf . The Division cautions taxpayers that the payment deadline of May 17, 2021 cannot be further extended and penalties and interest on underpayments will be calculated from that date, even if a taxpayer requests additional time to file. The Division also caution taxpayers that the extension does not extend to estimated payments for the 2021 tax year which remain due on April 30, 2021 and cannot be extended. (Delaware Technical Information Memorandum No. 2021-3, 03/18/2021.)
April 13, 2020
The Delaware Department of Revenue (“DOR”) issued a Technical Information Memorandum in an effort to provide relief to all effected taxpayers. The provisions are as follows:
Any extension forms that would otherwise be submitted on paper may be submitted electronically to DOR at DOR_PublicService@delaware.gov. Please note an extension only extends the due date for filing, not for payment. The payment deadline will be July 15, 2020 and penalties and interest on underpayments will be calculated from that date, even if a taxpayer requests an additional extension of time to file.
In addition, throughout the COVID-19 Emergency, DOR continues to work with taxpayers who owe outstanding balances. [Source: https://revenuefiles.delaware.gov/2020/TIM2020-01_COVID-19_filing_extension.pdf]
Delaware has declared a state of emergency to prepare for the spread of coronavirus but all state offices currently remain open and the Department of Revenue will assist taxpayers with their tax filings. All taxpayers are encouraged to use the Division of Revenue’s online services at Revenue.Delaware.gov to ensure that they stay compliant with all tax filing and payment obligations. If taxpayers have questions or need assistance with Revenue’s online services, taxpayers can call the public service group at 302-577-8200.
All returns and payments filed with the Division of Revenue will be processed as they are received. Online filing for most returns is available at https://revenue.delaware.gov/file/. All returns received through electronic and internet filing methods are processed directly into Revenue’s system to allow expedient processing. Paper returns are processed as they are received and will be scanned into Revenue’s system for processing, but please be mindful that paper returns will take longer to be processed.
More on Taxes and the Coronavirus Pandemic.
Disclaimer: Please note this is the information that is readily available at this time, it is subject to change so please consult your Withum tax advisor.