Military Retirement Pay Income Tax Exclusion
Up to $12,500 of military pension income excluded from Delaware state income tax, rising to $15,000 (2027), $20,000 (2028), and $25,000 (2029 and beyond) under SB 219.
State BenefitDelawareTax Benefits
Verified September 30, 2026 against legis.delaware.gov
At a glance
- Benefit type
- Tax Benefits — Delaware
- Who it's for
- Veterans
- VA rating needed
- No rating requirement
- Estimated value
- Up to $825/year in tax savings
- Where it applies
- Delaware
- Last verified
- September 30, 2026
What is Military Retirement Pay Income Tax Exclusion?
Military Retirement Pay Income Tax Exclusion is a Delaware tax benefits benefit for veterans. Up to $12,500 of military pension income excluded from Delaware state income tax, rising to $15,000 (2027), $20,000 (2028), and $25,000 (2029 and beyond) under SB 219. The listed value is Up to $825/year in tax savings.
Who qualifies
- Veterans
- Available to any veteran
- Delaware residency
Who is eligible
Eligibility
Any individual receiving a U.S. military pension (all ages). Must file Delaware state taxes. Under SB 219, starting with tax year 2027, filers age 60 or older must have been legally domiciled in Delaware for at least 3 years (at least 5 years if domiciled on or after January 1, 2027).
What Military Retirement Pay Income Tax Exclusion covers
Covers
Exclusion of up to $12,500 of military pension income for tax year 2026. SB 219 (signed 2026) phases the exclusion up to $15,000 (2027), $20,000 (2028), and $25,000 (2029 and beyond). At Delaware's top marginal rate of 6.6%, the 2026 exclusion saves up to $825/year.
How to apply for Military Retirement Pay Income Tax Exclusion
How to apply
Via Delaware state income tax return (Schedule W / pension exclusion line).
Verified information & sources
- Last verified
- September 30, 2026
- Official source
- legis.delaware.gov
- Apply at
- revenue.delaware.gov
Compiled and fact-checked against the official source linked above. Benefit rules and dollar amounts change over time — always confirm current details at the official source before applying. A county Veterans Service Officer (VSO) is a free, accredited advocate who can review your eligibility and help you file at no cost.
How VetUnlock verifies benefitsFrequently asked questions about Military Retirement Pay Income Tax Exclusion
Who qualifies for Military Retirement Pay Income Tax Exclusion?
Military Retirement Pay Income Tax Exclusion is for Veterans; available to any veteran; delaware residency. See the eligibility details on this page and confirm with the official source before applying.
How much is Military Retirement Pay Income Tax Exclusion worth?
The listed value is Up to $825/year in tax savings. Amounts can change — confirm the current figure at the official source linked on this page.
How do I apply for Military Retirement Pay Income Tax Exclusion?
Apply through the official source linked on this page. A county Veterans Service Officer (VSO) can review your eligibility and help you file at no cost.
Where can I verify Military Retirement Pay Income Tax Exclusion?
Benefit rules and dollar amounts change, so always confirm current details at the official source linked on this page. A free, accredited county or state Veterans Service Officer (VSO) can also verify your eligibility and help you apply.