DELAWARE Question

[John of PA]

I am wondering if for 2018, a Delaware return can have itemized deductions if the Federal return takes the standard deduction. As you may know, many more 1040's this year will have the standard deduction. Thanks.

[Burke]

Doesn't appear so, unless the legislature took some action to allow it that I cannot find. Have you received your software yet? What is it doing?

[John of PA]

I was told today by a DE CPA that DE made no changes due to TCJA, however DE always allowed a decision to itemize to be made separate from what's being done on the 1040. I did not realize this. I heard in a webinar yesterday this problem exist with Georgia returns. Thank you Burke. Have not loaded any DE returns yet on Drake.

[Burke]

I was told today by a DE CPA that DE made no changes due to TCJA, however DE always allowed a decision to itemize to be made separate from what's being done on the 1040..

Really? It appeared to me in researching this, that it stated specifically if you took a standard ded on the federal, you had to take a standard ded on the state, as well as the same treatment on itemized deductions. (VA does this, as do many other states.) However, I have often elected to itemize on the federal return when it was very close but less than the allowable standard deduction, in order to itemize on the state return, if this treatment resulted in a larger refund from the two combined. I found two (unrelated), non-governmental web sites which stated Delaware allowed you to take a standard on federal, and itemize on the state. However, the instructions on Page 11 of the Delaware iincome tax booklet state to enter the amount on Line 29 of your Federal Sche A if you wish to itemize. (and to attach the Schedule). So does this mean you fill out a substitute Schedule A just for state filing purposes?

[Burke]

Found it:

TITLE 30(a) first paragraph: "...... or, if the person does not itemize deductions, [or elects the credit for foreign taxes paid] on the federal return, the person may deduct the sum of the itemized deductions to which the person would have been entitled had the person itemized the deductions (including the deduction for foreign taxes paid) on the federal return:....."

[Burke]

. I heard in a webinar yesterday this problem exist with Georgia returns.

As far as I can tell, GA is the same as VA. Itemize on federal, itemize on state. Some states allow you to itemize on the state if you take standard on federal. Does anyone publish a chart on this???

PS: I did find a site that says 10 states tie to federal standard or itemized usage: GA, KS, ME, MD, NE, NY, (think this changed due to de-coupling), NC, OK, UT and VA.

[BP.]

I am wondering if for 2018, a Delaware return can have itemized deductions if the Federal return takes the standard deduction. Thanks.

For a mock Delaware non-resident return, if I complete a Schedule A, my software chooses the standard federal deduction, which was higher than the itemized deductions, and the Delaware return is itemized.

[John of PA]

The software is allowing DE itemized when the Fed is standard deduction (Drake), it even allows an automatic override of the DE filing status if not done automatically, so this answers the question, yes you can itemize on the DE and take the standard on the 1040. Thank you for your input.