Delaware S Corporation Reconciliation And Shareholders Instructions

S Corporation Reconciliation And Shareholders Instructions
Form 1100Si
2023

DELAWARE

S CORPORATION RECONCILIATION AND
SHAREHOLDERS INFORMATION
FORM SCT-RTN (FORMERLY 1100S)

Revised 12/20/23

Form SCT-RTN

CALENDAR YEAR 2023 and FISCAL YEAR ENDING 2024 TAX YEAR
§ 1158(a) of Title 30 of the Delaware Code requires that every corporation
that is an S Corporation for Federal income tax purposes pay on behalf of
each non-resident shareholder an amount equal to the highest personal
income tax rate set in § 1102(a) of Title 30 on the amount of the nonresident’s share of distributive income apportioned to Delaware. If there
is an overpayment of estimated tax paid on behalf of the non-resident
shareholders, the overpayment must be included proportionally in the
amount of estimated tax claimed by the non-resident shareholders upon
the filing of their Delaware non-resident personal income tax returns.
Overpayments of estimated tax will not be refunded to the S Corporation.
Federal Schedule K-1 cannot be used in lieu of Delaware Schedule A-1
when filing the S Corporation Reconciliation and Shareholders Information
Return. Delaware Schedule A-1 must be filed for each resident and nonresident shareholder of the S Corporation.
The Division of Revenue Public Service offices are open in all three counties
to assist you and answer your tax questions. Addresses and telephone
numbers are listed below.
A Composite Personal Income Tax Return, Form CMP-TAX (available at
the offices listed below), for qualifying non-resident shareholders of a S
Corporation may be filed in lieu of individual non-resident personal income
tax returns if all of the following conditions are met:
1.	 Non-resident shareholders included in the composite return must be
non-residents of the State of Delaware for the full taxable year.
2.	 Non-resident shareholders included in the composite return must have

INSTRUCTION HIGHLIGHTS

no income (including spouse’s) from sources within the State of Delaware
other than his or her distributive share from the S Corporation.
3.	 All non-resident shareholders included in the composite return must
have the same tax year ending for income tax purposes.
Title 30 of the Delaware Code authorizes nine different income tax credits
for which an S Corporation may be eligible. The income tax credits that are
available are titled Economic Development, Green Industries, Research &
Development, Land & Historic Resource Conservation, Historic Preservation
and Repair Tax Credit, Neighborhood Assistance, New Economy Jobs,
Employer Tax Credit for hiring individuals with disabilities, and Automatic
External Defibrillator tax credit. Please see page 6 and 7 of this instruction
booklet for details concerning the income tax credits.
Step by step instructions for completing the Delaware S Corporation
Reconciliation and Shareholders Information Return are provided in this
booklet. The Division of Revenue is committed to provide quality services
to all businesses. Additional information is available on our website at
www.revenue.delaware.gov or https://tax.delaware.gov. Our site contains
information on registering your business, Tax Tips to guide you in filing
various business tax returns, and the ability to electronically contact a
representative of the Office of Business Taxes with your tax questions. Our
site enables any business whose current Delaware business license expired
on December 31, 2023 to renew their business license for 2024 online and
pay their license fee by using a credit card. The business will have the ability
to print a temporary license directly from the website and subsequently be
mailed a permanent license. In addition, any business renewing a license
online may also elect a one- or three-year business license.

Office Locations
TOLL-FREE TELEPHONE NUMBER - DELAWARE ONLY 1-(800) 292-7826

DOVER

WILMINGTON

GEORGETOWN

Division of Revenue

Division of Revenue

Division of Revenue

Thomas Collins Building
540 S. DuPont Highway, Suite 2
Dover, DE 19901

State Office Building
820 N. French Street
Wilmington, DE 19801

20653 DuPont Blvd, Suite 2
Georgetown, DE 19947

Telephone: (302) 744 -1085

Telephone: (302) 577 - 8205

Telephone: (302) 856 - 5358

Fax: (302) 744 -1095

Fax: (302) 577 - 8662

Fax: (302) 856 - 5697

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General Instructions
CORPORATIONS REQUIRED TO FILE RETURNS
Every S Corporation deriving income from sources within Delaware
is required to file an S Corporation Reconciliation and Shareholders
Information Return (Form SCT-RTN).
The Federal Small Business Job Protection Act amended Subchapter S
of the Internal Revenue Code by revising the manner in which Federal S
Corporations may organize. The State of Delaware has issued regulations
(Technical Information Memorandum 98-2) to adopt the provisions of §§
1361 through 1379 of the Regulations to the Internal Revenue Code of 1986.
A valid election under the rules prescribed by the Internal Revenue Service
by a parent S Corporation to treat a wholly owned subsidiary as a QSSS
shall be valid for Delaware purposes upon making the federal election.
Entities carrying on a trade or business within Delaware are subject to
the provisions of Title 30 of the Delaware Code and are required to file
income tax returns for such years. An S Corporation which has elected to
treat a subsidiary which is conducting business in Delaware as a QSSS shall
be a taxable entity in Delaware and the items of income, deductions, and
apportionment factors of the QSSS shall be included on the income tax
return of the S Corporation. The QSSS is also subject to the licensing and
gross receipts provisions of Title 30 of the Delaware Code with respect to its
business activities conducted within Delaware.
§ 1902(b) (9) of Title 30 of the Delaware Code exempts from the corporation
income tax qualified small business corporations having a valid election
under Subchapter S of the Federal Internal Revenue Code.
If exemption is claimed under this §, complete Form SCT-RTN, S Corporation
Reconciliation and Shareholders Information Return and attach a copy of
Federal Form 1120S.
The State of Delaware has not adopted by statute or by regulation, the
provisions of the Uniform Division of Income Tax Purposes Act nor is the
State a member of the Multistate Tax Commission. The State of Delaware
does not recognize or approve using Combined Reporting, Unitary or
Waters Edge methods of filing a Delaware corporate income tax return.
Consolidated returns are not permitted under Delaware Law.

PERIOD COVERED BY RETURN
The income year of a corporation is the same as the taxable year for which
the corporation reports for purposes of the Federal income tax. Accordingly,
this return is to be filed for the calendar year 2023 or fiscal year beginning
in 2023 and ending in 2024.
Short period returns are required when there is a change of the annual
accounting period or where the S Corporation is not in existence for the
entire year.
Short period returns are also required when there is a change of an S
election. Chapter 19, Corporation Income Tax, of Title 30 of the Delaware
Code does not contain a specific provision for the filing of a short period
corporate final income tax return. § 1901(10) provides that the “income
year” of a corporate taxpayer shall be the taxable year for which a taxpayer
computes its net income for purposes of the Federal income tax. § 1903
provides that the entire net income of a corporation is the amount of its
federal taxable income with specific modifications. As a result, if a short
period Federal return is due, a short period Delaware return is also due
for the same tax period. Short period returns of dissolving corporations
are due on the fifteenth day of the third month after the end of the short
period year.

PENALTIES AND INTEREST
Returns filed late are subject to a penalty of 5% per month, up to a
maximum of 50% of the tax liability due, plus interest of 1/2% per
month from the original due date until paid. In addition to the above
penalties and interest, an additional penalty of 1% per month (not to
exceed 25%) is imposed for failure to pay (in whole or in part) the tax liability
shown to be due on a timely filed return.

ESTIMATED TAX FILING REQUIREMENTS
Every S Corporation deriving income from sources within Delaware must
make estimated payments of personal income tax on behalf of its nonresident shareholders based on the non-resident’s share of the distributive

income of the corporation. The S Corporation must make an estimate
of its distributive income for the taxable year (apportioned to Delaware)
and multiply it by the percentage of stock owned by the non-resident
shareholders. This amount is then multiplied by 6.60% to determine the
amount of personal income tax required to be paid by the S Corporation.
Every S Corporation with non-resident shareholders is required to declare
the amount of its estimated tax liability and prepay the amount of its
estimated tax liability in four installments. House Bill No. 257, signed July
23, 1997, eliminates the requirement for the S Corporation to file and
remit estimated tax when the S Corporation’s taxable period is less than
92 calendar days. The declaration and remittance equal to 50% of the
S Corporation’s estimated tax liability is due on or before the fifteenth day
of the fourth month of the taxable year.
The declaration (Form SCT-TAX) is due even if the estimated tax liability is
zero and no remittance is required. The remaining SCT-TAX vouchers,1-4,
are not required to be filed if the estimated tax liability remains at zero for
the remainder of the taxable year. If the estimated tax liability is greater
than zero during any of the remaining three quarters of the taxable year,
quarterly estimated tax payments are due according to the following
schedule: 20% on the fifteenth day of the 6th month of the taxable year;
20% on the fifteenth day of the 9th month of the taxable year and 10% on
the 15th day of the twelfth month of the taxable year.
Failure to make a declaration or file and pay the required payments of
personal income tax will result in a penalty. A penalty of 1.5% per month
is imposed on any underpayment or late payment of estimated taxes from
the due date of the estimated payment to the date the tax was paid. The
penalty will not be imposed if the total estimated tax timely paid equals or
exceeds 80% of the current year’s liability or equals or exceeds 100% of the
tax liability of the first preceding taxable year.

Small Corporation Rule:
The term “small corporation” means any corporation, including, without
limitation, an S corporation subject to § 1158 of this title, if such corporation
(or any predecessor corporation) had aggregate gross receipts from sales
of tangible personal property and gross income from other sources both
within and without the State for purposes of computing the ratio described
in schedule 1-D of this return that do not exceed the applicable threshold of
$20,000,000 for any 2 of the 3 taxable years immediately preceding the
taxable year for which estimated tax is being computed.
For small corporations, 25% of the estimated tax liability for the current
taxable year shall be paid with the tentative return filed on the fifteenth
day of the fourth month of the current taxable year, and the balance of the
estimated tax shall be paid in 3 equal installments of 25% on each of the
fifteenth day of the sixth month of the current taxable year; the fifteenth
day of the ninth month of the current taxable year; and the fifteenth day of
the twelfth month of the current taxable year.
A program has been established enabling a corporation to remit tentative
tax payments electronically. This program is made available to all
corporations on a voluntary basis. To participate in the EFT program, you
must complete the State of Delaware Electronic Funds Transfer Program,
ACH Authorization form. This form and its instructions are available by
contacting the Division of Revenue, Electronic Funds Coordinator, Carvel
State Office Building, P.O. Box 8763, Wilmington, DE 19899-8763, (302) 5778231.

WHEN TO FILE AND EXTENSIONS
File Delaware Form SCT-RTN on or before the fifteenth day of the third
month following the close of the taxable year. A request for an automatic
extension of six months to the Internal Revenue Service will automatically
extend by six months the filing date for the Delaware return. If an automatic
Federal extension has been granted, a copy of the extension must be
attached to the final return when filed.
An extension of time with payment for filing the Delaware S Corporation
Reconciliation and Shareholders Information Return is made by filing
SCT-EXT (formerly 1100P-EXT) contained in the Delaware PAYMENT OF
PERSONAL INCOME TAX BY S CORPORATIONS coupon on or before the
due date of the original return. Please note that a timely filed extension
extends the period for filing a final return but does not extend the period
for paying tax liability. Payment of the estimated personal income tax
required to be paid on behalf of its nonresident shareholders must be

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remitted with the request for extension. § 511 of Title 30 of the Delaware
Code provides that the Director may grant an extension of time for filing
any return and may require a bond not exceeding twice the amount of the
tax.

You must attach a copy of your Federal return Form 1120S for the income
year, including all schedules and exhibits, including Schedule K and K-1,
when filing your Delaware return.

An extension beyond the automatic six-month period may be requested
by letter on or before the due date of the return. A copy of the Division of
Revenue Approval Letter must be attached to the final return when filed.

A copy of Delaware Schedule A-1 from the Delaware S Corporation
Reconciliation and Shareholders Information Return must be attached
to the Delaware personal income tax return when filed by the respective
resident or non-resident shareholder.

NOTICE OF FEDERAL TAX ADJUSTMENT

ELECTRONIC REPORTING OF FORM 1099 INFORMATION

If a taxpayer files an amended Federal income tax return, it is required within
90 days to file an amended State of Delaware S Corporation Reconciliation
and Shareholders Information Return together with a copy of the amended
Federal return. If the net income reported by the taxpayer to the Internal
Revenue Service for Federal income tax purposes is changed or corrected
by the Internal Revenue Service, or the tax computed on the return is
re-determined by the Internal Revenue Service, notice of such changes,
corrections or adjustments must be reported to the Division of Revenue
within 90 days after the final determination by the Internal Revenue Service
is made.

Any S corporation required to report Form 1099-MISC, 1099-R or 1099-NEC
information to the Internal Revenue Service on magnetic media must also
report to the Delaware Division of Revenue on magnetic media. The duty
to report 1099-MISC and 1099 NEC information to the Division of Revenue
applies in the case of Forms 1099-MISC and 1099 NEC issued to persons
resident in Delaware or to non-residents of Delaware for work performed
within Delaware. Forms 1099-R are required to be reported to Delaware in
the case of any person issued a Form 1099-R on which Delaware taxes are
reported as withheld. Delaware participates in the Combined Federal/State
Filing Program, the 1099-MISC, 1099-NEC and 1009-R forms are required to
be filed directly with Delaware. All others, including 1099-DIV and 1099-INT
need not be filed.

ATTACH COPY OF FEDERAL RETURN

SPECIFIC INSTRUCTIONS FOR FORM SCT-RTN
IMPORTANT
To ensure the timely and proper processing of your S Corporation Reconciliation
and Shareholders Information Return, ALL lines and schedules must be
completed. Specific line items, supported by separate attached schedules, must
be entered on the appropriate line of this return. Failure to complete all lines
and schedules will delay the processing of your return. For purposes of these
instructions, “taxpayer” means the S Corporation.

INTRODUCTION
Non-resident shareholders are subject to Delaware personal income tax on
their portion of the distributive share of the income and deductions of an S
Corporation apportioned to Delaware.
An S Corporation is not entitled to adjust its taxable income by a net operating
loss carryback or carryforward. There are no statutory modifications or
adjustments to Federal taxable income that permits such net operating
loss deductions to be considered in computing Delaware taxable income
under Chapter 19, Title 30 of the Delaware Code. Refer to Delaware Tax
Ruling 78-3.
For Delaware personal income tax purposes, resident shareholders are
entitled to the benefit of their portion of any net operating loss incurred
by the S Corporation. Commencing with tax years beginning on or after
January 1, 1992 and to the extent that a net operating loss carryforward
resulted from a Delaware S Corporation, net operating loss deductions
may be carried forward on the personal income tax returns of non-resident
shareholders. These losses may include losses incurred in tax periods
beginning before January 1, 1992. There is no net operating loss carryover
allowable on the shareholder’s Delaware personal income tax return that
does not derive from a carryover on the shareholder’s Federal personal
income tax return for the same year.

NON-RESIDENT SHAREHOLDERS
An S Corporation is exempt from corporate taxation. Resident and nonresident shareholders must report their respective share of S distributive
income on their individual personal income tax returns. A Composite
Personal Income Tax Return, Form CMP-TAX, for qualifying non-resident
shareholders of an S Corporation may be filed in lieu of individual nonresident personal income tax returns if all of the following conditions are
met: (1) the non-resident shareholders must be non-residents of the State
of Delaware for the full taxable year, (2) the non-resident shareholders
must not have income (including spouse’s) from sources within the State
of Delaware other than his or her distributive share from the S Corporation
and (3) the non-resident shareholders must have the same tax year ending
for personal income tax purposes. An S Corporation which has one or more
non-resident shareholders is required to make estimated personal income
tax payments on behalf of its non-resident shareholders.
S Corporations which conduct business in more than one state must allocate
and apportion their income among the respective states. Please refer to
the specific instructions for Delaware Schedule A and for Delaware Form

SCT-RTN to calculate distributive income for a non-resident shareholder.

DELAWARE SCHEDULE 1 - RECONCILIATION OF
ORDINARY INCOME TO TOTAL INCOME
The Ordinary Income reported on Federal Form 1120S, Schedule K, Line
1 must be modified for Delaware purposes by certain additions and
subtractions to reflect the “flow through” items to the shareholders that
are not included in ordinary income on Federal Form 1120S. Begin with
Schedule 1 on the back of Delaware Form SCT-RTN.

Delaware Schedule 1A - Gross Real and Tangible
Personal Property
Line 1
Enter the original cost value of all real and tangible personal property owned
at the beginning and at the end of the taxable year allocable (a) within the
State of Delaware and (b) within and without the State of Delaware.

Line 2
Enter the value of all real and tangible personal property rented at the
beginning and at the end of the taxable year allocable (a) within the State
of Delaware and (b) within and without the State of Delaware. The rented
real and tangible property is valued at 8 times the annual rental. Goods in
transit should be included in the property factor of the state to which the
goods are to be delivered. Real and tangible personal property owned by
the United States Government that is used or operated by the taxpayer
shall be disregarded.

Line 3
Enter the total of Lines 1 and 2.

Line 4
Enter the original cost of real and tangible personal property, the income
from which is separately allocated on Lines 4 through 14 of Delaware
Schedule A. Also enter on Line 4 the value of property currently under
construction or property not used in the S Corporation’s business.
Subtract Line 4 from Line 3 and enter the remainder on Line 5.

Line 5
Calculate on Line 5 the average value of the real and tangible property by
adding the total beginning and total ending values of property within the
State of Delaware and property within and without the State of Delaware
respectively, and divide each sum by two.

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Line 6

Line 2

Enter the calculated average value of the real and tangible property. Include
in the property factor on the appropriate lines, the taxpayer’s share of real
and tangible property owned and rented resulting from the taxpayer’s
proportionate ownership as a general or limited partner in an active
partnership.

Enter in the denominator on Line 2, the average value of all real and
tangible personal property owned or rented both within and without the
State of Delaware as reported in Delaware Schedule 1A and compute the
percentage.

Line 3

Delaware Schedule 1B - Wages, Salaries and Other
Compensation

Enter in the numerator on Line 3, the wages, salaries and other compensation
paid or accrued to employees within the State of Delaware.

Line 1

Line 4

Enter the total wages, salaries, bonuses, and other compensation paid or
accrued to employees engaged in employment within the State of Delaware
and within and without the State of Delaware during the taxable year.
Include in the wage factor on the appropriate line, the taxpayer’s share
of wages, salaries, bonuses, and other compensation paid or accrued to
employees, resulting from the taxpayer’s proportionate ownership as
a general or limited partner in an active partnership. Enter on Line 2 the
wages, salaries, bonuses, and other compensation paid or accrued to
general executive officers. “General Executive Officers” means the officers
of record in the state in which the taxpayer is incorporated.

Enter in the denominator on Line 4, the wages, salaries and other
compensation paid or accrued to employees within and without the
State of Delaware as reported in Delaware Schedule 1B and compute the
percentage.

Line 5
Enter in the numerator on Line 5, the gross receipts apportioned to the
State of Delaware.

Line 6

Line 3

Enter in the denominator on Line 6, the total gross receipts subject to
apportionment as reported in Delaware Schedule 1C and compute the
percentage.

Subtract Line 2 from Line 1 and enter the remainder on Line 3.

Delaware Schedule 1C - Gross Receipts Subject to
Apportionment

Lines 7 and 8

Enter in the column titled, “Within Delaware”, the gross receipts from the
sales of tangible personal property physically delivered within Delaware
to the purchaser or his agent located within the State of Delaware (but not
including delivery to the United States Mail or to a common or contract
carrier for shipment to a place outside Delaware). Enter in the column
titled, “Within and Without Delaware”, total gross receipts from the sales of
tangible personal property both within and without Delaware during the
income year.

Compute the respective percentages, carried to at least six (6) decimal places
(do not round), and enter in the appropriate column. Total the percentages
and divide by: A factor of three if all three apportionment factors (property,
wages, and sales) are present; a factor of two if only two apportionment
factors (property or wages or sales) are present; a factor of one if only one
apportionment factor (property or wages or sales) is present. For example,
if the corporation has property and sales but does not pay any salaries,
the apportionment percentage should be determined by the average of the
two factors of property and sales. Enter the resulting percentage on Line 8,
Delaware Schedule 1D and on Line 2, Delaware Schedule A, Form SCT-RTN.

Include in the factor on the appropriate line, the taxpayer’s share of gross
receipts from the sale of tangible property and gross income from other
sources resulting from the taxpayer’s proportionate ownership as a general
or limited partner in an active partnership.

Form SCT-SSA - DELAWARE SCHEDULE A RECONCILIATION OF ORDINARY INCOME TO TOTAL NET
INCOME

Line 2

Line 1-Ordinary Income (Loss)

Enter in the column titled “Within Delaware”, all other gross income (if
any) from other sources, including receipts from services rendered within
Delaware, which are not tax exempt, and which are not directly allocated
on Lines 4 through 14 of Delaware Schedule A. Gross income from sources
within Delaware includes distributions from partnerships in which the
taxpayer is a corporate partner, when the State of Delaware is maintained
as the principal place from which the trade or business of the taxpayer is
directed or managed. Other income is considered gross income from a
Delaware source when the activity that gives rise to the income is performed
within the State of Delaware. Enter the total on Line 2 in the column titled,
“Within and Without Delaware”, all other gross income (if any) from other
sources both within and without Delaware which are not tax exempt, and
which are not directly allocated on Lines 4 through 14 of Delaware Schedule
A. Include a separate schedule listing the items of other income included on
this line. Add the amounts on Line 1 and Line 2 and enter the total on Line 3.

Enter the amount from Federal Form 1120S, Schedule K, Line 1.

Line 1

If you are selling tangible personal property or providing services within
Delaware, you are liable for a Delaware Business License and the payment
of a gross receipts tax on the receipts received from such sales or services.

Delaware Schedule 1D - Determination of
Apportionment Percentage

Line 2 - Apportionment Percentage
Enter the apportionment percentage from Delaware Form SCT-RTN,
Schedule1D, Line 8.

Line 3 - Ordinary Income Apportioned to Delaware
Multiply Line 1 by the percentage on Line 2 and enter the result on Line 3.

Line 3 (a)
Enter in Column A the amount from Line 1 and in Column B the amount
from Line 3.

ADDITIONS:
Lines 4 and 5
Net Income (Loss) From Rental Real Estate and Other Rental Activities

Line1
Enter in the numerator on Line 1, the average value of all real and tangible
personal property owned or rented in the State of Delaware.

Enter the amount from Federal Form 1120S, Schedule K, Lines 2 and 3c
respectively in Column A. Enter in Column B the net income or loss from
rental activities from property physically located within Delaware.

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Lines 6, 7, and 8 - Interest, Dividend and Royalty Income

CALENDAR OR FISCAL YEAR OPERATION

Enter the amount from Federal Form 1120S, Schedule K, Lines 4, 5a and
6 in Column A. Enter in Column B, Lines 6, 7, and 8 respectively, taxable
interest, dividends, and royalties if the S Corporation’s commercial domicile
is located in Delaware.

Delaware Form SCT-RTN and its schedules is an information return used
to reconcile Federal ordinary income to Delaware distributive income and
to pay any additional tax due on behalf of non-resident shareholders for
the calendar year 2023 or fiscal year beginning in 2023 and ending in 2024.
If the S Corporation conducts business on a fiscal year basis, insert the
beginning and ending dates of the fiscal year in a MM/DD/YYYY format.

Lines 9 and 10 - Net Short and Long Term Capital Gain
Loss)
Enter the amount from Federal Form 1120S, Schedule K, Lines 7 and 8a in
Column A. Enter in Column B, Lines 9 & 10 respectively, the net short- term
and long-term capital gain or loss if the asset is employed in a trade or
business in Delaware.

Line 11 - Net Gain (Loss) Under § 1231 (Other Than
Casualty or Theft)
Enter the amount from Federal Form 1120S, Schedule K, Line 9 in Column
A. Enter in Column B, Line 11, § 1231 gains (losses) if the asset is employed
in a trade or business in Delaware.

Line 12 - Other Income (Loss)
Enter the amount from Federal Form 1120S, Schedule K, Line 10 in
Column A. Enter in Column B, any other income, or loss not included on
Lines 1 through 9, such as recoveries of tax benefit items; gambling gains
and losses or net gain (loss) from involuntary conversions due to casualty
or theft derived from sources within Delaware.

Line 13 - Total
Add Lines 3(a) through 12 in Columns A and B.

SUBTRACTIONS:
Line 14 - § 179 Expense Deduction
Enter the amount from Federal Form 1120S, Schedule K, Line 11 in
Column A. Enter in Column B the same amount if the asset, for which the
§ 179 expense deduction is claimed, is employed in a trade or business in
Delaware.

NAME, ADDRESS AND EMPLOYER IDENTIFICATION NUMBER
Enter the complete name, corporate headquarters address, Delaware
address (if different from the corporate headquarters address) and
taxpayer identification number of the S Corporation. Employer identification
numbers are issued by the Internal Revenue Service by filing Federal Form
SS-4.

DATE AND STATE OF INCORPORATION AND NATURE OF
BUSINESS
Enter the date in MM/DD/YYYY format and the state in which the S
Corporation is incorporated. Enter a short phrase to describe the nature of
business conducted by the S Corporation.

CHECK THE APPLICABLE BOX
Check the Initial Return box if this the first time the
S Corporation is filing a Reconciliation and Shareholders Information
return. Check the change of address box if the address of the S
Corporation has changed from the previous year’s filing.
Check
the Amended Return box to make changes to a filed original
return. Check the Extension Attached box if the S Corporation has
obtained an approved Federal or Delaware extension of time to file
a reconciliation and shareholders information return.
Check the
Small Corporation box if the S Corporation meets the standards out
lined in Title 30 Chapter 19 § 1905 (5). Check the ESOP box if the
S Corporation is wholly owned by an employee stock ownership trust.

OUT OF BUSINESS
Enter the exact date in MM/DD/YYYY format when the S Corporation ceased
business operations. Only enter a date if the S Corporation went out of
business during, or on the last day of the S Corporation’s tax year ending.

Line 15 - Charitable Contributions

LINE 1 - TOTAL NET INCOME

Enter the amount of charitable contributions paid by the
S Corporation during its tax year from Federal Form 1120S, Schedule
K, Line 12a in Column A. Enter in Column B the same amount if the S
Corporation’s commercial domicile is located in Delaware or if the taxpayer
can demonstrate that the contribution is connected with sources within
Delaware.

Enter the amount from Delaware Form SCT-RTN, Schedule A, Column B,
Line 19.

Line 16 - Other Deductions

LINE 2 - SUBTRACTIONS FROM TOTAL NET INCOME
Enter on Line 2(a) the amount of interest income received from bonds
or securities of the United States or its instrumentalities, less applicable
expenses to the extent such interest income is included in Line 1.

Enter the amount from Federal Form 1120S, Schedule K, Line 12d in Column
A. Enter in Column B, Line 16 the same amount if the S Corporation’s
commercial domicile is located in Delaware.

Enter on Line 2(b) an amount equal to the portion of wages paid or incurred
for the taxable year which is disallowed as a deduction for Federal purposes
under Subsection (a) of § 280C, IRC, relating to the portion of wages for
which the New Jobs credit is claimed.

Line 17 - Depletion Expense

Attach copy of Federal Form 5884 - New Jobs Credit. Add Lines 2(a) and 2(b)
and enter on Line 2(c).

Enter all depletion expense included on Federal Form 1120S, Schedule K,
Line 15e in Column A. Enter the same amount in Column B.

LINE 3

Line 18 - Total

Subtract Line 2(c) from Line 1 and enter on Line 3.

Add Lines 14 through 17 and enter the amount on Line 18.

LINE 4 - ADDITIONS TO TOTAL NET INCOME

Line 19 - Total Net Income (Loss)

Enter on Line 4(a) the amount of interest income received from obligations
issued by any State or political subdivision other than the State of Delaware
or its political subdivisions to the extent such interest income is not included
in Line 1.

Subtract Line 18 from Line 13 and enter the amount on this line. Enter the
amount from Column B on Line 1, Delaware FormSCT-RTN.

FORM SCT-RTN - S CORPORATION RECONCILIATION AND
SHAREHOLDERS INFORMATION RETURN

Enter on Line 4(b) the amount of any depletion expense allowable under
Federal Law; to the extent it is in excess of cost depletion.
Enter on Line 4(c) the amount of the charitable contributions included in
Line 1 for which the Delaware Land & Historic Resource Conservation credit

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was granted.
Add Lines 4(a) through 4(c) and enter on Line 4(d).

LINE 5 - DISTRIBUTIVE INCOME
Enter on Line 5 the amount of distributive income by adding Lines 3 and
4(d).

LINE 6 - PERCENTAGE OF STOCK OWNED BY NONRESIDENT SHAREHOLDERS
Enter on Line 6 the percentage of stock owned by non-resident shareholders.
If the S Corporation has shareholders who have not been residents of
Delaware for the entire year, please contact the Division of Revenue for
specific instructions. Complete Delaware Schedule A1, Shareholder’s Share
of Income, Deductions and Credits for ALL shareholders.

STOP HERE IF ALL SHAREHOLDERS ARE DELAWARE
RESIDENTS
LINE 7 - DISTRIBUTIVE INCOME OF NON-RESIDENT
SHAREHOLDERS
Multiply Line 5 by the percentage on Line 6. This represents
the entire distributive income attributable to non-resident shareholders.

LINE 8 - TAX DUE
Multiply Line 7 by 6.60 %. This is the amount of estimated taxes which must
be paid on behalf of the non-resident shareholders.

LINE 9 - ESTIMATED TAX PAID
Enter on Line 9 the estimated tax paid for the taxable year from Delaware
Form SCT-TAX. Include on this line payments made with requests for
extensions of time to file. The statute requires prepayment by the S
Corporation on behalf of the non-resident shareholders. Please refer to
Estimated Tax Filing Requirements on Page 2 and Form SCT-TAX for due
dates and amounts required to be paid.

LINE 10 - OTHER PAYMENTS
Enter on Line 10 other payments not included on Line 9 and attach an
explanation of such payments.

LINE 11 - APPROVED NON-REFUNDABLE INCOME TAX
CREDITS
Enter on Line 11 the approved non-refundable tax credits from Delaware
Form 700, multiplied by the percentage of stock owned by non-resident
shareholders.

LINE 12 - APPROVED REFUNDABLE INCOME TAX CREDITS
Enter on Line 12 the approved refundable tax credits from Delaware
Form 700, multiplied by the percentage of stock owned by non-resident
shareholders.

LINE 13 - TOTAL PAYMENTS AND CREDITS
Add Lines 9 through 12 and enter the amount on Line 13.

LINE 14 - BALANCE DUE OR OVERPAYMENT
If Line 8 is greater than Line 13, enter the balance due and pay in full.
If Line 13 is greater than Line 8, the amount on Line 13 will be included
proportionally in the amount of estimated tax claimed by the non-resident
shareholder(s) upon the filing of their Delaware non-resident personal
income tax return. A refund will not be issued directly to the S Corporation
for any overpayment of estimated tax paid on behalf of the non-resident
shareholder(s). Refer to the instructions for Delaware Schedule A1 for
reporting such amount to the non-resident shareholders.

FORM SCT-SSR - DELAWARE SCHEDULE A1

of Income, Deductions and Credits for all shareholders. One copy is to be
given to each shareholder and a copy must be attached to this return.
Delaware Schedule A1 is similar to Federal Schedule K-1, with the addition
of several lines for state modifications and credits. Complete Delaware
Schedule A1 by multiplying the respective lines on Delaware Schedule A
and Delaware Form SCT-RTN by the percentage of stock owned by each
shareholder. Use Column A to report resident shareholder information
and Column B to report non-resident shareholder information. Federal
Schedule K-1 cannot be used in lieu of Delaware Schedule A1 when filing
the S Corporation Reconciliation and Shareholders Information Return.
Delaware Schedule A1 must be filed for each resident and non-resident
shareholder of the S Corporation.

DELAWARE’S CORPORATION INCOME TAX CREDITS
Title 30 of the Delaware Code authorizes nine different credits to be
applied against Delaware income tax. The income tax credits that are
available are titled Economic Development, Green Industries, Research
and Development, Land and Historic Resource Conservation, Historic
Preservation and Repair, Neighborhood Assistance, New Economy Jobs,
Employer Tax Credit for hiring individuals with disabilities, and Automatic
External Difibrillator tax credits.
Certain income tax credits require pre-approval by other Delaware agencies.
See Form 700 instructions for more information.

ECONOMIC DEVELOPMENT CREDIT
Any S Corporation conducting a qualified activity within Delaware and
has placed in service a qualified new or expanded facility may be eligible
for Delaware S Corporation income tax credits equal to $400 for each
qualified employee hired and $400 for each $100,000 invested in the
qualified facility. The facility may also be eligible for a ten-year reduction
in the Delaware gross receipts tax. The qualified new or expanded facility
must hire 5 or more qualified employees and invest a minimum of
$200,000 in property, plant, and equipment to be eligible for the credit.

A qualified activity is defined as:
1.	 Engaging in business as a manufacturer or wholesaler.
2.	 Operation of a facility for the purpose of scientific, agricultural, or
industrial research.
3.	 Administration, management or support operations of a manufacturer,
wholesaler, or research facility.
4.	 Any activity more than 50% of whose annual gross receipts are derived
from computer processing, data preparation, engineering services,
consumer credit reporting services, and wholesale sale of computer
software.
5.	 Any activity more than 50% of whose annual gross receipts are derived
from aviation services and employing at least 100 qualified employees.
6.	 Telecommunications services which shall include the administration,
supervision, maintenance, repair, and deployment of the physical
infrastructure associated with telecommunications services. This
qualified activity requires 50 qualified employees and $750,000 in
capital investment to qualify for the Economic Development Credits.
A facility may be considered a qualified facility without hiring any qualified
employees if the capital investment equals the greater of $1 million or
15% of the unadjusted basis in the facility at the close of the taxable year
preceding the date on which installation or construction of the investment
commenced.
Any S Corporation that places a qualified facility into service in a “targeted
area” may be eligible for increased Delaware S Corporation income tax
credits equal to $650 for each qualified employee hired and $650 for each
$100,000 invested in a qualified facility.

A targeted area is defined as:
1.	 Any real property located within Delaware that is owned by this State,
any political subdivision of the State or any agency or instrumentality of
the State or its political subdivisions.
2.	 Any real property located within Delaware that is owned by a non-profit
organization as defined by § 501(c) of the Internal Revenue Code.
3.	 Any area located within Delaware that has been approved by the United
States Department of Commerce as a general-purpose foreign trade
zone.
4.	 Any 1980 Delaware census tracts, as defined by the United States
Department of Commerce, Bureau of the Census.

An S Corporation must prepare Delaware Schedule A1, Shareholders Share
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Any S Corporation that places a qualified facility into service on a qualified
“brownfield” site may be eligible for Delaware S Corporation income tax
credits equal to $650 for each qualified employee hired and $650 for each
$100,000 invested in the brownfield site. A brownfield site is defined as a
vacant or unoccupied site that has been environmentally contaminated by
commercial or industrial activity as verified by the Department of Natural
Resources and Environmental Control. If the brownfield site is located in a
targeted area, the corporation may be eligible for Delaware S Corporation
income tax credits equal to $900 for each qualified employee hired and
$900 for each $100,000 invested in the brownfield site.

GREEN INDUSTRIES CREDIT
Reductions in Waste Release - Any manufacturer that voluntarily reduces
by at least 20% the weight of wastes in the current year in comparison to
the amount of wastes in the immediately preceding 12 months and are
reported under the Toxic Release Inventory reflected by Inventory Report
forms filed for the year may be eligible for Delaware S Corporation income
tax credits equal to $400 for each 10% of waste reduction during the year
and for each of the 4 succeeding years during which the reduced amount
of release is maintained.
Any manufacturer that voluntarily reduces by at least 50% the weight of
other wastes released in the current year in comparison to the amount
of wastes in the immediately preceding 12 months may be eligible for
Delaware S Corporation income tax credits equal to $400 for each 10% of
waste reduction during the year and for each of the 4 succeeding years
during which the reduced amount of release is maintained.
•	 Use of Recycled Materials as Raw Materials - Any manufacturer who
derives at least 25% by weight of its raw materials from either recycled
materials or materials removed from the Delaware solid waste stream,
satisfies the requirements of § 2011(a) of Title 30 of the Delaware
Code and uses such materials in its qualified facility may be eligible
for Delaware S Corporation income tax credits equal to $650 for each
qualified employee hired and $650 for each $100,000 invested in the
qualified facility.
S Corporation income tax credits equal to $900 for each qualified employee
hired and $900 for each $100,000 invested in the qualified facility.
•	 Processing of Waste Materials - Any S Corporation who is engaged in
the business of processing materials removed from the Delaware solid
waste stream for resale as raw materials to manufacturers, satisfies the
requirements of § 2011(a) of Title 30 of the Delaware Code and whose
qualified investment is devoted entirely to the processing and resale
of materials removed from the Delaware solid waste stream may be
eligible for Delaware S Corporation income tax credits equal to $650 for
each qualified employee hired and $650 for each $100,000 invested in
the qualified facility.
If the qualified facility is located in a targeted area, the S Corporation may
be eligible for Delaware S Corporation income tax credits equal to $900 for
each qualified employee hired and $900 for each $100,000 invested in the
qualified facility.

RESEARCH AND DEVELOPMENT CREDIT
The Commitment to Innovation Act (Senate Bill 200) changed the Delaware
Research and Development credit by removing the 5 million dollar cap in
total credits that the Delaware Division of Revenue can issue, as well as
making the credit refundable.
Any S Corporation that incurs qualified research and development expenses
may be eligible for Delaware S Corporation income tax credits.
An S Corporation may elect Delaware research and development tax credits
for the taxable year equal to: (1) 10% of the excess of the S Corporation’s
total Delaware qualified research and development expenses for the
taxable year over the S Corporation’s Delaware base amount, or (2) 50%
of Delaware’s apportioned share of the S Corporation’s federal research
and development tax credit calculated using the alternative incremental
credit method under § 41(c)(4) of the Internal Revenue Code of 1986, using
federal definitions and methodology. Delaware’s apportioned share of the
federal credit shall be the amount of the alternative incremental credit
the S Corporation can claim under § 41(c) (4), multiplied by a percentage
equal to the ratio of the S Corporation’s Delaware qualified research and
development expenses for the taxable year to the S Corporation’s total

qualified research and development expenses for the taxable year.

LAND AND HISTORIC RESOURCE CONSERVATION CREDIT
Any S Corporation may be eligible for Delaware S Corporation income tax
credits equal to 40% of the fair market value of any land or interest in land
located in Delaware which is conveyed for the purpose of open space,
natural resource, and/or biodiversity conservation or historic preservation
as an unconditional donation in perpetuity by the landowner/taxpayer to a
public or private conservation agency eligible to hold such land and interest
therein for conservation or preservation purposes.
HISTORIC PRESERVATION AND REPAIR TAX CREDIT
Under this provision, a person who wishes to repair or otherwise preserve
a historic property may apply to the State Historic Preservation Office for a
partial credit for qualified expenditures.
To qualify for the credit, an individual must first submit a rehabilitation
proposal to the Historic Preservation Office to ensure that the restoration
will meet federal and state guidelines. Credits are to be granted on a firstcome, first-served basis, not to exceed a capped value ($5 million in statute,
but adjusted year to year) in any one fiscal year. Upon project completion,
the State Preservation Office must certify that the end product conforms
to federal and state requirements. Then the Division of Revenue will
determine the appropriate value of the tax credit to be issued. This credit is
transferrable between parties. All transfers must be recorded with the State
Historic Preservation Office and the relevant tax agency.

NEIGHBORHOOD ASSISTANCE TAX CREDIT
S-Corps that invest in community development programs approved by the
Director of the Delaware State Housing Authority and the Neighborhood
Assistance Act Advisory Council are entitled to a tax credit equal to 50% of
the amount invested by a business firm in a program or in a CommunityBased Development Organization. The tax credit is limited to the lesser of
50% of a firm’s qualifying investment or $50,000. The aggregate amount of
tax credits awarded in any one year may not exceed $1 million.

NEW ECONOMY JOBS CREDIT
Any qualified employer that hires and employs no fewer than 50 additional
qualified employees in new eligible jobs, or no fewer than 200 additional
vital employees in new vital jobs or retains at least 200 jobs in Delaware
may make application for the Delaware tax credits.
An S corporation may elect Delaware New Economy Jobs Tax Credits for
the first certified year and for the nine taxpayer years thereafter pursuant
to the Delaware Tax Code, Title 30, Chapter 20. These tax credits can be up
to a maximum of 40% of the withholding tax paid to the State of Delaware.

EMPLOYER TAX CREDIT FOR HIRING INDIVIDUALS WITH
DISABILITIES
Any employer that hires referrals from vocational rehabilitation may
be eligible for Delaware tax credits. The employer may elect tax credits
for the taxable year equal to 10% of the gross wages paid to a qualified
employee not to exceed $1,500 per qualified employee in the course of the
employee’s sustained employment during the taxable year pursuant to the
Delaware Tax Code, Title 30, Chapter 20.
Any S Corporation may be eligible for Delaware S Corporation income tax
credits equal to 40% of the fair market value of any land or interest in land
located in Delaware which is conveyed for the purpose of open space,
natural resource, and/or biodiversity conservation or historic preservation
as an unconditional donation in perpetuity by the landowner/taxpayer to a
public or private conservation agency eligible to hold such land and interest
therein for conservation or preservation purposes.

AUTOMATIC EXTERNAL DEFIBRILLATOR TAX CREDIT
Any business that places an automatic external defibrillator in service at a
business location in Delaware is entitled to a credit equal to $100 per unit.

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