Division of Revenue Director Jennifer R. Hudson has announced that Delaware will begin processing 2019 individual income tax returns on Monday, January 27, 2020. To expedite this process, citizens are encouraged to file their 2019 State of Delaware Personal Income Taxes online at de.gov/filetax or through their tax software provider.

The 2019 tax year filing deadline is Thursday, April 30, 2020. On average, refunds from electronically filed returns are issued within 2 weeks, while refunds from paper-filed returns average seven weeks or more. Last year, the average time to issue a refund for all tax filing methods combined was approximately 25 days.

If you still owe taxes from prior years, you may find yourself listed on Delaware’s Delinquent Taxpayers web page. To address outstanding balances, please contact the Division of Revenue’s Account Management Department at (302) 577-8785 and ask to speak to your account assignee. By legislative order, larger balances are targeted first for publication. Each quarter, the next 100 business taxpayers and 100 personal taxpayers who have balances over $1,000 are posted to this site.

Taxpayers should be aware that Delaware does not maintain reciprocity agreements with other states. As a result, anyone who is not a Delaware resident, but who has worked in Delaware, must file a Delaware tax return. Delaware Residents who work out-of-state are required to file returns with Delaware in addition to a return in the state where they worked. By law, Delaware employees should receive their W-2 employment forms by January 31, 2020 for any job worked during the 2019 calendar year. Those who haven’t received a W-2 by January 31st should contact their employer.

For filing information and more, please visit revenue.delaware.gov.

The implementation of last year’s Tax Cuts and Jobs Act (TCJA) continues to affect many corporate taxpayers, particularly those that have filed extensions for the 2018 tax year. In Delaware, corporate income tax returns that are under extension are due on the same date as extended federal corporate income tax returns. Many taxpayer-related organizations have requested that Delaware offer relief from late-filing penalties for those corporate taxpayers who file their 2018 Delaware income tax return after the deadline, but on or before November 15. Because the Division of Revenue recognizes that some taxpayers may have trouble meeting Delaware’s extended filing deadline because the return due date coincides with the extended due date for federal returns, Delaware will be implementing a grace period for corporate taxpayers who file on or before November 15.

While the grace period should automatically eliminate the late-filing penalty for any Forms 1100 and 1100-S that are submitted on or before November 15, 2019, taxpayers should be aware that if they do receive a notice of assessment, a protest may be filed with the Tax Conferee. This should be sent via email to taxconferee@delaware.gov, or by mail, in writing, to:

Campbell Hay, Esquire
Tax Conferee
Delaware Division of Revenue
P. O. Box 8714
Wilmington, DE 19801

If you have any questions, please contact the Delaware Division of Revenue at (302) 577-8205.

Example Scam Letter April 2019

The Delaware Division of Revenue wants to alert citizens to a new taxpayer scam that is happening in Delaware. Victims may receive a letter from “The Bureau of Tax Enforcement” that threatens property seizure and wage garnishment unless they call a toll-free number to “avoid enforcement.”

“These scam mailings are designed to trick taxpayers into thinking they have received an official communication from the Division of Revenue,” warns Director Jennifer R. Hudson. The notices threaten the seizure of the taxpayer’s property if the recipient fails to make immediate payment. The scammers are accessing public records in order to include taxpayer-specific information on the notices to make them appear legitimate, and then using pressure tactics and fear to motivate the recipient into taking immediate action.

Taxpayers who think they may have received such a letter should contact the Division of Revenue at (302) 577-8200, option 3, with any questions. Taxpayers should also file a Consumer Complaint with the Delaware Department of Justice’s Consumer Protection Unit. Information about the complaint process is available at https://attorneygeneral.delaware.gov/fraud/cpu/ and the complaint form is available online – Consumer Complaint Form.

Prior to the Tax Cuts and Jobs Act (TCJA), individuals were permitted to claim an unlimited amount of state and local real property and income taxes paid as itemized deductions. Starting with tax years 2018, those deductions will be limited.

Delaware follows federal law regarding itemized deductions, and taxpayers will be entitled to an itemized deduction for state and local taxes equal to the total real property taxes and local income taxes paid – up to the maximum $10,000 (or $5,000 for married individuals filing a separate or combined separate return).

Taxpayers will continue to be allowed to claim itemized deductions on a Delaware return, even if the taxpayer has claimed the standard deduction on a federal return.

For more information, and detailed examples, the Delaware Division of Revenue has published a Technical Information Memorandum, available here: https://de.gov/tim201901.

With tax season well underway, Division of Revenue officials are noting an uptick in Delaware returns reporting overstated Delaware income tax withholding. The appropriate amount to report is limited to the total in Box 17 of the W-2 form provided by your employer (or the sum of those amounts if you have multiple employers), plus any state income tax withholding reported on a Form 1099-R.

Division of Revenue Director, Jennifer R. Hudson, Esq. noted “We are reviewing all returns that have overstated withholding, and they may be treated as fraudulent returns.”

Overstated withholding can be a sign of fraud, and returns with higher amounts than usual are being treated as suspicious. That means these returns will be pulled for review, extending the length of time required to process your return – and potentially delaying your refund.

If you have questions about the appropriate amounts to report, please contact the Division of Revenue Public Service area at 302-577-8200, or 1-800-292-7826.