TaxtirementState guides · DE
How Delaware taxes retirement income
- Delaware doesn't tax Social Security benefits.
- Exclusions and subtractions for retirement income (details below):
- Pension/retirement exclusion, age 60+: from age 60, at most $12,500 per person.
- Pension exclusion, under age 60: at most $2,000 per person.
- Exclusion for persons 60 or over or disabled, low income: from age 60, at most $2,000 per person, income limits apply.
- Rates for 2026: 0% to 6.6%, graduated.
At a glance
| Income tax | Yes |
|---|---|
| Rates (2026) | 0% to 6.6%, graduated |
| Starts from | Federal adjusted gross income (AGI) |
| Standard deduction | $3,250 single, $6,500 married filing jointly |
| Personal credit | $110 per person |
| Age 65 and older | $2,500 extra deduction per person |
| Social Security | Not taxed |
| Retirement income exclusions | 3 (see below) |
| Roth conversions | Taxable |
| Capital gains | Taxed like other income |
| Local income tax | Yes, in some places (see below) |
Tax rates
Brackets apply to Delaware taxable income. Other filing statuses are in the rules reference.
| Rate | Single: taxable income | Married filing jointly: taxable income |
|---|---|---|
| 0% | $0 to $2,000 | $0 to $2,000 |
| 2.2% | $2,000 to $5,000 | $2,000 to $5,000 |
| 3.9% | $5,000 to $10,000 | $5,000 to $10,000 |
| 4.8% | $10,000 to $20,000 | $10,000 to $20,000 |
| 5.2% | $20,000 to $25,000 | $20,000 to $25,000 |
| 5.55% | $25,000 to $60,000 | $25,000 to $60,000 |
| 6.6% | $60,000 and up | $60,000 and up |
Social Security
Delaware doesn't tax Social Security benefits.
Pensions, IRAs and 401(k)s
Pension/retirement exclusion, age 60+ (Form PIT-RES line 6)
Each person 60 or over on December 31 excludes the lesser of $12,500 or (employer pension + 'eligible retirement income'). Eligible retirement income = dividends, capital gains net of capital losses, interest, net rental income from real property, and distributions from qualified retirement plans (IRC 4974: IRA, 401(k), Keogh) and government 457 plans. Only one exclusion per person even with multiple pensions; spouses each get their own. Jointly owned investment income is split 50/50 between spouses, and one spouse cannot use the other's unused cap. Early distributions (1099-R code 1 or subject to the federal early-withdrawal penalty) do not qualify. Social Security is not part of this exclusion (it is subtracted separately on line 8a).
Pension exclusion, under age 60
Under 60 on December 31: lesser of $2,000 or the employer pension amount (U.S. military pensions: up to $12,500). IRA/401(k) distributions and investment income do not qualify for the under-60 exclusion; early distributions do not qualify.
Exclusion for persons 60 or over or disabled, low income (PIT-RES line 11)
Small income-tested exclusion; rarely applies to a household with meaningful IRA/pension income. Instructions suggest separate filing if only one spouse qualifies.
Income limit: Single/MFS: line 10 income (Delaware AGI before this exclusion) $10,000 or less AND earned income under $2,500 → $2,000. Joint: both spouses 60+ (or disabled), line 10 $20,000 or less AND combined earned income under $5,000 → $4,000.
Roth conversions
A Roth conversion counts as taxable income for Delaware. Whether a retirement income exclusion can cover part of it depends on the rules above.
Capital gains
Taxed like other income, at the rates above.
Credits and relief for older residents
- Personal credit $110 per exemption (taxpayer, spouse, dependents) plus an additional $110 credit for each taxpayer/spouse age 60 or over on December 31 (line 27b); nonrefundable.
- Additional standard deduction $2,500 per person 65+ and another $2,500 if blind (max $5,000 per person); only if the Delaware standard deduction is used (not with itemized deductions).
- Delaware EITC (nonrefundable 20% of federal EIC, or a refundable alternative) — mostly irrelevant to retirees.
Local income taxes
City of Wilmington earned income (wage) tax of 1.25% on wages/net profits of residents and of nonresidents working in the city; it does not apply to pensions, IRA distributions, Social Security or investment income. No county income taxes.
More detail from our research notes
Brackets are identical for all filing statuses and are not indexed. Married couples can file jointly (status 2) or 'married filing combined separate' on one form (status 4, each spouse computes tax on their own income with the single brackets, $3,250 standard deduction each) — status 4 usually lowers tax when both spouses have income, and Taxtirement should consider it. Tax for taxable income under $60,000 comes from the tax table (rounded bands); $60,000+ uses the rate schedule. Roth conversions: a conversion is a taxable IRA distribution, so for a person 60+ it counts toward the $12,500 eligible-retirement-income cap; for a person under 60 it does not qualify (only employer pensions qualify under 60). SB 219 of 2026 (85 Del. Laws; 30 Del. C. 1106(b)(3)c-f, current Code text ): military pension exclusion becomes the greater of the general exclusion or $15,000 (2027), $20,000 (2028), $25,000 (2029+) of a U.S. military pension, at any age, per spouse; and a domicile test for the 60+ exclusion: 3 years if domiciled before 1/1/2027, 5 years if domiciled on or after 1/1/2027. Delaware has no sales tax. Proposed higher brackets (HB 13 / HS 2) were not enacted: the current Code text of 30 Del. C. 1102 ( read 2026-10-02) shows no 2025-26 session (85 Del. Laws) amendment; rates are unchanged for 2026 and 2027.
Pending confirmation
These points were still being confirmed against Delaware's published 2026 forms when this page was built. Most are waiting on forms the state publishes around the turn of the year.
4 items
- 2026 PIT-RES forms not yet published; values are from the 2025 PIT-RES form/instructions and the Delaware Code. Rates (30 Del. C. 1102(a)(14)), the $3,250/$6,500 standard deduction, $2,500 65+ add-on, $110 credits and the $12,500/$2,000 exclusions are fixed dollar amounts, not indexed. Expected: 2026 PIT-RES instructions, Dec 2026-Jan 2027, https://revenue.delaware.gov/ (revenuefiles.delaware.gov/2026/PITForms_Instructions/).
- Roth conversion eligibility for the 60+ exclusion is inferred from the statute's 'distributions from qualified retirement plans (IRC 4974)' language; no explicit DE guidance on conversions found.
- Domicile test (30 Del. C. 1106(b)(3)f.4, SB 219 of 2026): modeled from tax year 2027, as the fiscal note dates it , using the household's 'resident since' year; years are counted to the end of the tax year (moved in year S: qualifies when tax year - S >= 3, or 5 if S >= 2027). Whether DOR counts to the start or end of the year, and whether it applies to 2026 returns, awaits the PIT-RES instructions.
- Wilmington wage tax rate (1.25%) not confirmed from a primary source in this pass.
Sources
Every figure comes from these documents, mostly the state's own forms, instructions and statutes.
- 2025 PIT-RSA and PIT-RES instructions lines 13-21 and p. 12: own itemized (medical over 7.5% federal AGI, property tax within the federal SALT cap, DE tax never), no 65+ extra when itemizing, combined-separate split by income (research/states/itemized.json)https://revenuefiles.delaware.gov/2025/PITForms_Instructions/PIT-RSA_2025-01_PaperInteractiveIPM.pdf
- Tax rates (30 Del. C. §1102(a)(14)); 30 Del. C. 1102 current text: rates unchanged, no 85 Del. Laws amendmenthttps://delcode.delaware.gov/title30/c011/sc01/index.html
- Pension exclusion, eligible retirement income definition, 60+ low-income exclusion, SS subtraction, standard deduction $3,250/$6,500 + $2,500 age 65, personal credits $110 (+$110 age 60); 30 Del. C. ch. 11 subch. II current text incl. SB 219 (2026) military schedule 2027-2029 and domicile testhttps://delcode.delaware.gov/title30/c011/sc02/index.html
- 2025 PIT-RES instructions (pension exclusion worksheet and example, line 11 worksheet, line 21, line 27b, SS line 8a)https://revenuefiles.delaware.gov/2025/PITForms_Instructions/Instructions/PIT-RES_Instructions_2025-01.pdf
- 2025 PIT-RES form (standard deduction $3,250/$6,500, $2,500 add'l, $110 credits)https://revenuefiles.delaware.gov/2025/PITForms_Instructions/PIT-RES_2025-01_PaperInteractiveIPM.pdf
- HB 13 bracket proposal died in committee (secondary)https://www.delawarepublic.org/tags/personal-income-tax
- SB 219 of 2026 engrossed text and fiscal note: 60+ greater of $12,500 and the military amount from 2027; domicile test § 1106(b)(3)f.4 for tax years after Jan 1, 2027https://legis.delaware.gov/json/BillDetail/GeneratePdfEngrossment?engrossmentId=37641&docTypeId=6
Taxtirement's Delaware calculation is also checked against a second, independent implementation on 1,000 random households. How we check our numbers.
See your own years. Taxtirement applies these Delaware rules, and the federal and Medicare rules, to your household for every year of retirement, and shows the calculation behind each number. Coming November 2026 for iPhone, iPad and Mac.
This page summarizes Delaware's 2026 rules as Taxtirement applies them, for education and planning. It isn't tax advice, and it doesn't cover every situation (for example part-year residents, businesses or military-only provisions). Rules change; check the state's current instructions, or a tax professional, before you act. Spotted something wrong? Tell us.