CHAPTER 461

FORMERLY

SENATE BILL NO. 578

AN ACT TO AMEND CHAPTER 11, TITLE 30 OF THE DELAWARE CODE, RELATING TO ITEMIZED DEDUCTIONS FOR THE PERSONAL INCOME TAX.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF DELAWARE:

Section 1. Amend §1109, Chapter II, Title 30 of the Delaware Code by striking subsection (a) of said section in its entirety and substituting in lieu thereof a new subsection (a) to read as follows:

"(a) General. - In determining trocabic income under this Chapter, in lieu of the standard deduction provided by §1108 of this Title, a resident individual may elect to deduct the sum of the itemized deductions claimed on his federal income tax return in determining his federal taxable income, or, if he does not itemize deductions or elects the credit for foreign taxes paid on his federal return, he may deduct the sum of the itemized deductions to which he would have been entitled had he itemized his deductions (including the deduction for foreign taxes paid) on his federal return

(1) Reduced by:

(A) The amount thereof representing income taxes imposed by this State;

(B) The amount of any income tax imposed on him for the taxable year by another state of the United States or a political subdivision thereof or the District of Columbia on income derived from sources therein if he elected to take such amount as a credit in accordance with §1111(a) of this Title; and

(2) Increased by:

(A) An amount equal to the excess of the state employee automobile mileage reimbursement allowance over the Standard mileage rate allowed as a charitable deduction for federal income tax purposes for unreimbursed automobile transportation expense incurred by an Individual while serving as a volunteer for a charitable organization as defined in §170(c), Internal Revenue Code [26 U.S.C. §170(c)); and

(B) An amount equal to one- half of the cost of insurance paid by a self- employed taxpayer for health care for himself, spouse and dependents to the extent the taxpayer's payment for health insurance exceeds his medical expenses deductible in computing his federal taxable Income. For purposes of this sub- paragraph, 'self- employed taxpayer' shall mean a resident individual who derives more than one- half of his gross income from a trade, business or profession and not derived as an employee. Income in the nature of interest, dividends or other investment income shall not constitute self- employment income. No self-employed taxpayer whose total cost of insurance for health care for himself, spouse and dependents exceeds the gross income from his trade, business or profession shall be entitled to the deduction under this sub- paragraph."

Section 2. Amend §1124, Chapter 11, Title 30 of the Delaware Code by adding at the end of said Section the following:

"A non- resident shall be permitted the deduction provided In §1109(a)(2llB) of Title 30 only if his gross income from self- employment from sources within Delaware exceeds one-half of his total gross income from all sources both within and without Delaware and only to the extent provided in §1126 of this Title."

Section 3. This Act shall be effective for tax years beginning after December 31, 1986.

Approved July 24, 1986.