Delaware Lottery, Power Ball, and Delaware Lottery Video winnings are not included in Delaware taxable income. Lottery winnings from States other than Delaware are taxable and cannot be entered on this line.

Gambling Losses

Wagering losses can be deducted only to the extent of wagering gains. Under some circumstances Delaware Lottery Winnings may exceed the amount of net wagering gain subject to federal tax. The amount of subtraction is therefore limited to the lesser of:

1. The difference between the amount of net gambling winnings included in federal adjusted gross income and the amount of gambling losses allowable in determining federal itemized deductions; or
2. The amount of gain from Delaware Lottery winnings.

Travelink Program

You may enter on this line any income you received by virtue of your employers providing or subsidizing a vehicle for your commuting to and from work, provided:

1. Your employer is an approved participant in the Department of Transportation Travelink Program; and
2. The amount you are subtracting on this line was expressly included in the total income Line 26.

Social Security/Railroad Retirement Benefits

Social Security and Railroad Retirement benefits are not taxable in Delaware and therefore, should not be included in taxable income. Enter on Line 34 the total of any taxable payments included on Line 26.

Higher Education

Distributions received from qualified retirement plans (IRC Sec. 4974, including IRAs), cash or deferred arrangements (such as 401(k) plans) and government deferred compensation plans (IRC Sec. 457) may be excluded from Delaware adjusted gross income to the extent they are used in the same tax year to pay for books, tuition or fees at an institution of higher education attended by the taxpayer or by his or her dependents who have NOT attained the age of 26 by December 31, 2005; and as long as such amounts have been included in federal adjusted gross income.

Certain Lump Sum Distributions

Enter below the amount, if any, of lump sum distributions included in federal adjusted gross income which you used Form 329 to calculate the tax on Line 7.

Delaware Net Operating Loss Carryovers

Taxpayers who were prevented in previous years from carrying federal net operating losses to their Delaware returns (because of Delawares $30,000 limit on net operating loss carrybacks) are permitted to carry these additional losses forward on their Delaware return in years following the loss year.

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