FOR IMMEDIATE RELEASE

FOR FURTHER INFORMATION

Becky Smalley
(302)577-8667
rsmalley@state.de.us

2002 TAX SEASON KICK-OFF

FILE YOUR DELAWARE RETURN DIGITALLY FOR THE FASTEST POSSIBLE REFUNDS

The filing deadline for Delaware tax returns is Tuesday, April 30, 2002.

Internet on-line filing goes live on Jan. 15.

Wilmington, Del. -- William M. Remington, Delaware Director of Revenue announced today that the 2002 tax-filing season is off to a flying start. 

In December over 123,000 personal income tax booklets were mailed to taxpayers, as well as 287,000 postcards to taxpayers who filed digital returns or had their returns prepared by tax preparers or authorized volunteers. 

Approximately 435,000 tax returns are expected to be filed this year; 50% are expected to be filed digitally. 

The number of taxpayers choosing a digital method to file their returns is growing in popularity. Digitally filed returns increased by 66% last year over the previous year by taxpayers who were pleased with the results of these faster and more accurate tax-filing methods that generate tax refunds in less than a week, assuming the returns are problem free. When additional documents are required, the turnaround time takes longer. 

Why the push for faster refunds?
  "Refunds represent an overpayment of taxes by taxpayers. We want to return this money to them as quickly as possible, so we urge taxpayers to use a digital method to file their returns, not paper," said Remington. "Problem-free digital returns will result in a refund turnaround time of less than a week compared with paper returns, which could take considerably longer in all cases, but particularly so if they are filed in April."

What does digital filing mean for taxpayers? 
According to Remington, "It means quick refunds and high assurance of accurate filing." Remington encourages taxpayers to "take the simplest route to comply with their tax obligations. Use the Internet if you can, or file digitally through a preparer or with purchased software. Digital mechanisms result in the fastest refunds, especially if you elect direct deposit. If you owe, and file on the Internet, you can use your credit card, check or money order, or authorized direct debit to pay your balance due." 

TAX BOOKLETS & POST CARDS

Over 123,000 Delaware tax booklets have been mailed to taxpayers; 95,850 resident and 27,530 non-resident booklets. In addition, approximately 287,000 post cards were mailed.

Those who received postcards include resident and nonresident taxpayers who filed digital returns last year or had their return prepared by a tax preparer or through a volunteer tax preparation program, such as IRS's VITA Volunteer program or the Tax Counseling For the Elderly program sponsored by the American Association of Retired Persons (AARP.)

3 DIGITAL METHODS FOR FILING DELAWARE RETURNS to:

Ensure accurate returns and faster refunds.

1) Delaware's ON-LINE filing program from a home, work or public library computer.
2) Joint IRS/Delaware E-FILE program through a paid or volunteer preparer or with
    purchased software.
3) BAR-CODED PAPER returns through a paid preparer or purchased software. 

7 WAYS TO FILE DELAWARE RETURNS DIGITALLY 

Home or work personal computer.

1) File ON-LINE from the Division of Revenue's web site, www.state.de.us/revenue.
2) Electronically file (E-FILE) with purchased software or consult the IRS web site at
     www.irs.gov/elec_svs/partners.html
3) File a BAR-CODED PAPER RETURN with purchased software.

Participating paid preparers.

4) E-FILE your return.
5) File a BAR-CODED PAPER RETURN.

Participating volunteer income tax preparation programs. 

6) E-FILE through the IRS's VITA Volunteer program or the Tax Counseling For the Elderly program sponsored by the American Association of Retired Persons (AARP.)

Public Libraries

7) File ON-LINE from Delaware public libraries where computers are available to the public.

ON-LINE INTERNET FILING - Goes live January 15.

Refunds in less than a week!!!
(If additional documentation is not required.)

File on-line from the Division of Revenue web site:  www.state.de.us/revenue

17,500 returns filed in 2000. 
26,500 returns filed in 2001, a 51% increase.
32,000 returns anticipated to be filed in 2002. 

What tax returns can be filed on-line?

Tax Year 2001 Resident, Resident EZ, Nonresident, Estimated returns and Extensions.

Benefits:

* No software to download.
* Filing is free.
* Takes 20 - 30 minutes to file a Delaware return over the Internet.
* E-mail notification of acceptance of return.
* On-line math verification that guarantees no unnecessary delays from mathematical
   errors.
* Fast refunds. Typically refunds are issued within 7 days, if additional documentation is
   not required.
* Direct Deposit of refunds is available. Direct Deposit is required for refunds over $500.
* Balance due amounts can be paid in one of three ways:

  Credit card: Master Card, Discover Card and VISA for amounts of $500 or less. 
  Authorized direct debit from banking accounts.
  Check or money order and payment voucher.

What do you need to get started.

* Have your completed federal return handy.
* A printer to print a copy of your completed return for your records.
* To use direct deposit for your refund or direct debit to pay your balance due, you will need your checking or savings routing and account numbers. If you use a credit union, verify the correct routing number. It will be printed on financial documents issued to you by your credit union. If in doubt, contact your credit union. Entering an incorrect routing number will cause a delay in the issuance of your refund. 

Certain restrictions apply, such as: 
* Reporting of income from at least one W-2 or 1099 form.
* No amended or fiscal year returns.

What can taxpayers do if they don't have access to a computer with Internet capabilities?

Visit their Delaware public library and ask to use one of their computers.

Joint Federal/Delaware electronic filing. 

Electronic filing is a convenient, accurate, fast and easy method of filing Federal and Delaware individual income tax returns. See your tax advisor for more details concerning the Federal/State Electronic Filing Program.

66,000 returns filed in 2000 
75,700 returns filed in 2001, 15% increase 
83,000 returns anticipated to be filed in 2002.

Refunds can be directly deposited to checking or savings accounts.
Balance due amounts are to be paid with a check or money order and payment voucher.

* 2-D BAR-CODED PAPER RETURNS

Refunds in less than a week from date of receipt!!!
(If additional documentation is not required.)

Bar-coding used by participating tax preparers.
All information on return and schedules is scanned instantly, requires no human capture of data.

33,800 returns filed in 2000.
93,400 returns filed in 2001. (Nearly tripled.)
105,000 returns anticipated to be filed in 2002. 

Refunds can be directly deposited to checking or savings accounts.
Balance due amounts are to be paid with a check or money order and payment voucher.

WHAT'S NEW 

* The Delaware Resident EZ return provides a line for claiming the credit for taxes paid to another state.

WHAT HAS NOT CHANGED 

* Tax rates for tax year 2001 did not change. They are the same as for tax year 2000. Delaware's top personal income tax rate remains at 5.95% on income over $60,000 


* Direct Deposit of refunds is available for all three digital methods for filing Delaware returns, as well as paper returns. 

* Standard Deduction -- remains at $6,500 for married filing joint and $3,250 per individual for all other filing statuses.

* Personal Tax Credit -- instead of personal exemptions, Delaware provides a $110 personal tax credit for each personal exemption claimed on the federal return.

* Volunteer firefighters' credit -- Delaware provides a $300 volunteer firefighters' credit.

* Child Care Credit -- Delaware allows a credit of 50% of the child and dependent care credit allowable for federal income tax purposes.

* Payment of Estimated Taxes may be required if the Delaware tax liability less payments and credits can reasonably be expected to exceed $400. You may pay your estimated taxes on line at www.state.de.us/revenue. If you pay your estimated taxes online and you owe tax, the payment is required to be debited directly from your checking or savings account. You will need your checking or savings routing and account numbers at the time you file. If you want to pay by check, you must use the paper Form 200-ES that is obtainable from the Division of Revenue offices.
Payment due dates   For the period April 30, 2002 1/1/02 through 3/31/2002 
                                                                   June 17, 2002 4/1/02 through 5/31/2002
                                                                   Sept. 16, 2002 6/1/02 through 8/31/2002
                                                                   Jan. 15, 2003 9/1/02 through 12/31/2002

* Tax Benefits for individuals over 60 years of age: Social Security Benefits are not taxable.

Additional Standard Deduction -- for taxpayers 65 and over, and/or blind, $2,500 per individual, maximum $5,000 per individual if the taxpayer elected the standard deduction.

Additional Personal Tax Credit - for taxpayers 60 and over, $110 per individual.

Pension Exclusion: $2,000 for taxpayers under 60  $12,500 for taxpayers 60 and over

Qualified pension income plus eligible retirement income including: dividends, capital gains, interest, net rental income from real property, qualified retirement plans (IRC Sec. 4974) such as IRA, 401(K), Keogh plans and government deferred compensation plans (IRC Sec. 457.)

INFORMATION FROM THE DIVISION OF REVENUE WEB SITE 

www.state.de.us/revenue

* Personal Income Tax On-line filing.

* Division of Revenue office locations and phone numbers.

* State tax forms for Delaware and the other states.

* IRS tax forms. 

* Delaware Tax Rates.

* Frequently Asked Questions for personal and business tax topics.

* Links to the IRS and other resources.

* Information on how to regain unclaimed property.

* How to get help if you owe back taxes to Delaware.

* Bankruptcy information.

* Tax Rulings and Regulations.

* Public Information Events.

* Press Releases.

* How to report tax fraud.

* Where's My Refund? Taxpayers eager to learn the status of their refund can inquire at the Division of Revenue's web site, www.state.de.us/revenue. Enter your social security number and the exact amount of the refund you are expecting, then click "Inquire."


TAX TIPS

1) File early. Using a digital method to file your return will result in the fastest possible refund: 
* On-line filing from the Division of Revenue's web site www.state.de.us/revenue, 
* Electronic filing through a paid preparer, or 
* Electronic filing using purchased tax software.
* Bar-coded paper return through a paid preparer. 

Digital filing methods will yield the fastest turnaround time for refunds. "Paper returns yield the slowest turnaround time -- upwards of 6 or more weeks to process, assuming no errors," said Remington. "If there are errors on your return it will take even longer." 

2) Complete your federal return first. The federal return is always the starting point for your Delaware return; Delaware piggy-backs from the federal return.

3) Verify your social security number. 

4) Double-check your math. Math verification is automatic with digitally filed returns. Many refunds are delayed due to math errors on paper returns.

5) Attach all reporting documents to paper returns: Sign and date your return.
* W-2's, 1099's, 1099R's.
* Copies of federal schedules required to be filed with your federal return, such as 
Schedules A, B, D, etc.
* A signed copy of other state's income tax return(s) if you claim a credit for taxes paid 
to another state. (Form W-2 is not sufficient.)
* Copies of Form A-1 for credit for taxes paid by an S Corporation.

6) Avoid A Late File Penalty -- File your return or an extension by April 30.
* If your final return has a balance due and it is filed after the due date, a late filing penalty will be assessed unless an Application for Automatic Extension (DE Form 1027) is filed. 

* Form 1027 is NOT required if the balance due on your 2001 return is zero or less and an extension has been filed with the IRS. 

* Form 1027 is not an extension of time to pay your liability, if you owe. Late file penalty is 5% per month to a maximum 50% of the balance due.

* Form 1027 can be filed on-line at www.state.de.us/revenue. If you file Form 1027 on-line and you owe tax, the payment is required to be debited directly from your checking or savings account. You will need your checking or savings routing and account numbers.

* Copies of Form 1027 may be obtained from the Division of Revenue's offices and are available for download from the Division of Revenue's web site. www.state.de.us/revenue.

If you have a balance due and can't pay, Remington says to file anyway. "I want to assure taxpayers that it is critically important to file their return on time so as not to add unnecessary penalties and interest to the amount due," Remington said. "After you file your return, call our office and a trained representative will work with you to design a payment plan to fit your financial situation."

* Amended returns:
If you discover a mistake on your return after you filed it, or received an additional financial statement, you can correct your return by filing a Delaware amended return, Resident Form 200-01X or Nonresident Form 200-02X. Amended returns are downloadable from the Delaware Division of Revenue's web site -- www.state.de.us/revenue or can be ordered by calling (302) 577-8200.


PERSONAL INCOME TAX RETURNS PROCESSED LAST YEAR

75,755 E-filed returns
93,484 2-D bar-coded paper returns 
26,538 On-line returns
229,852 Paper returns
425,629 Total

REFUNDS: Nearly 287,000 refunds were issued in 2001 for more than $119.4 million averaging $417. Refund turn-around time averaged 12 days. 


On-line Filing 

File your DE Resident, Resident-EZ or Nonresident return on-line from our web site and get your refund in less than a week, if no additional documentation is required. You may also file for an extension or pay estimated taxes online. 

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