Joint or separate returns of spouses

(a) If for any taxable year:

(1) The federal income tax liability of spouses, either both residents of this State or both nonresidents of this State, is determined on separate federal income tax returns, then their tax liabilities under this chapter for such taxable year shall be separately determined and they shall file separate returns;

(2) The federal income tax liability of spouses, either both residents of this State or both nonresidents of this State, is determined on a joint federal income tax return, then they may file either a joint return or separate returns under this chapter, whichever they elect;

(3) Neither spouse is required to file a federal income tax return and either or both are required to file a return under this chapter, then they may elect to file separate or joint returns, and, pursuant to such election, their tax liabilities under this chapter for such taxable year shall be either separately or jointly determined, as the case may be;

(4) Either spouse is a nonresident and the other a resident, then they shall file separate returns, on such forms as the State Tax Commissioner shall prescribe, and their tax liabilities under this chapter shall be separately determined, unless both elect to file a joint tax return in this State as if both were residents.

(b) (1) Whenever the federal income tax liability of a husband and wife is determined on a joint federal income tax return and they file separate Delaware income tax returns pursuant to this chapter, then the items of federal deduction shall be determined for purposes of §§ 1105 and 1109 of this title by reference to the amounts allowed on the husband and wife’s joint federal return and not by reference to amounts that would have been allowed had they filed separate federal returns.

(2) In accordance with regulations issued in the sound discretion of the Director, paragraph (b)(1) of this section shall not apply to federal deductions enacted after January 1, 1998, which are intended to reduce or eliminate disparities in federal taxation between married and single persons.