Delaware House Bill HB99

Delaware 2025-2026 Regular Session

• Introduced: 3/27/25
• Refer: 3/27/25
• Refer: 5/22/25

Caption

An Act To Amend Title 30 Of The Delaware Code And Chapter 118 Of Volume 83 Of The Laws Of Delaware Relating To Personal Income Taxes.

Summary

HB99 amends Delaware’s personal income tax law to adjust the state earned income tax credit (EITC) tied to the federal EITC. The bill clarifies that a refundable Delaware EITC of 4.5% of the federal credit applies beginning with tax years starting on or after January 1, 2021, and it increases that refundable credit to 20% of the federal credit for tax years beginning on or after January 1, 2025. The bill also preserves the existing structure for earlier years, including a nonrefundable 20% credit for tax years before 2021 and the option, for the 2021-2024 period, to claim either a nonrefundable 20% credit or the refundable 4.5% version. The measure further clarifies how the credit applies to spouses who file jointly for federal purposes but separately for Delaware, limiting use of the credit to the spouse with the greater Delaware tax liability. It also retains the rule that the nonrefundable version cannot exceed the tax otherwise due. In addition, the bill amends a prior act’s effective-date language so the credit change is tied to the implementation of the Division of Revenue’s personal income tax release of the Integrated Revenue Administration System and notice from the Secretary of Finance. The bill’s impact is primarily on Delaware taxpayers eligible for the earned income tax credit, especially lower- and moderate-income working residents who receive the federal EITC. By increasing the refundable portion of the state credit, the bill would provide larger cash-refund benefits to qualifying taxpayers beginning in 2025, while also resolving ambiguity about when the earlier refundable credit took effect. It affects Title 30 of the Delaware Code and the implementing provisions of Chapter 118 of Volume 83 of the Laws of Delaware. Because no committee transcripts or recorded votes were provided, there is no documented debate or formal vote history to gauge sentiment. Based on the bill text and synopsis, the measure appears generally supportive of working families and tax relief for low-income residents, with a technical clarification component regarding effective dates and administration. The absence of recorded opposition suggests no identified controversy in the available materials, though the refundable-credit expansion and its fiscal cost would typically be the main policy issue for lawmakers. Notable points of contention, if any, would likely center on the size and timing of the credit increase, the state revenue impact, and the administrative contingency tied to the revenue system rollout. The bill’s structure also raises implementation questions for the Division of Revenue, since the effective date depends on system modernization and formal notice from the Secretary of Finance.

Impact

HB99 amends Delaware’s income tax credit provisions in Title 30 by revising Section 1117 to increase the state earned income tax credit and by clarifying the effective date language in a prior enactment. It directly affects eligible resident taxpayers claiming the Delaware EITC, especially those who can benefit from a refundable credit, and it ties administration of the change to the state’s revenue system implementation. The bill also preserves existing limitations for separate filers and nonrefundable credits.

Sentiment

The available materials suggest a generally favorable sentiment toward the bill, as it expands a tax benefit for working, lower-income residents and clarifies prior law. The synopsis frames the measure as a credit increase and technical correction rather than a controversial policy shift. No committee testimony or vote record was provided, so there is no evidence of organized opposition or divided sentiment in the supplied context.

Contention

The main potential points of contention are fiscal and administrative rather than ideological: the cost of increasing the refundable EITC from 4.5% to 20% of the federal credit, the timing of the increase beginning in 2025, and the contingency tied to the Integrated Revenue Administration System rollout. Another possible issue is the treatment of married couples filing separately for Delaware purposes, since the bill limits use of the credit to the spouse with the greater tax liability. No specific objections or supporters are documented in the provided transcripts or votes.