State & Local Tax Impacts of COVID-19 for Delaware – 2021

Thoughtware Alert Published: May 03, 2021 | Updated: May 05, 2021

Information current as of April 7, 2021.

COVID-19 has changed life across the globe. Many taxing jurisdictions are taking mitigating actions to create social distance and aid taxpayers. The following is a running list of actions by jurisdiction, which generally result in additional time to file and/or pay. Further, many jurisdictions have closed their offices to in-person use by taxpayers and suspended their audit and administrative functions. This alert doesn’t cover similar waivers from local-level taxing authorities. These developments continue to quickly evolve; check with your BKD Trusted Advisor or visit our COVID-19 Resource Center for current information as needed.

Information Specific to Delaware

  • Delaware will match the federal filing and payment extensions for personal income tax returns, including composite returns, that would be due on April 30, 2021; they 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. The Division cautions taxpayers that the payment deadline of May 17, 2021, can’t 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 cautions taxpayers that the extension doesn’t extend to estimated payments for the 2021 tax year, which remain due on April 30, 2021, and can’t be extended.
    • Delaware DOR, Technical Information Memorandum No. 2021-3; March 18, 2021.
  • Delaware issued guidance to taxpayers on how to report days worked from a home located outside of Delaware on 2020 income tax returns. During the COVID-19 pandemic, Delaware operated under a state of emergency that commenced on March 12, 2020, which was updated from time to time, and that continues through the date of this guidance. During this time, various limitations were in place in Delaware and many employers directed employees to work remotely from their homes. Commencing with the fourth modification to the state of emergency, entered on March 22, 2020, through May 31, 2020, broad-based travel limitations and quarantine requirements were in place that caused many employers to require employees to work remotely. Based on the breadth of the restrictions, taxpayers may treat all days on which they actually worked from a home outside of Delaware during this period as days worked outside of Delaware on Schedule W. On June 1, 2020, Delaware commenced phase one of its reopening plan, which lifted many of the broad-based limitations. As part of this reopening plan, Delaware continued to encourage telework to the greatest extent possible. From and after June 1, 2020, taxpayers may report days worked from home as days worked outside of Delaware on Schedule W if the taxpayer’s employer directed the employee to work from home and directed that employees weren’t permitted to work at the Delaware location or, alternatively, if the employer strongly encouraged remote work but required an employee to seek advance permission to return in person. Once individual taxpayers were again permitted discretion to return to offices within Delaware in person, taxpayers may not report days worked from home as days worked outside of Delaware on Schedule W if the employee elected, but wasn’t required, to work remotely. The Division may require proof of any direction or advance permission given by an employer after June 1, 2020, with respect to remote work.
    • Delaware DOR, Technical Information Memorandum No. 2021-2; March 18, 2021.

For more information, reach out to your BKD Trusted Advisor or use the Contact Us form below.

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