DELAWARE -Senate Bill 219, legislation sponsored by Sen. Eric Buckson, (R-South Dover), has passed the Delaware State Senate and now heads to the House of Representatives for further consideration.
The measure would increase Delaware’s state income tax exemption for military retirement income, building on previous efforts to provide additional tax relief for military retirees living in the state.
Under current law, military retirees can exempt up to $12,500 in military pension income from Delaware state income taxes. SB 219 would gradually increase that exemption over three years, reaching $25,000 for all military pensioners beginning in tax year 2029, regardless of age.
According to the legislation, Delaware remains among the states that partially tax military retirement income. Twenty-seven states fully exempt military retirement income from taxation, while 12 others provide partial exemptions.
Supporters say the bill would help Delaware remain competitive with neighboring states while honoring retired members of the United States Armed Forces, including the Coast Guard, Space Force, NOAA Commissioned Officer Corps and Public Health Service Commissioned Corps.
The proposal follows legislative changes enacted in 2022 and 2024 that expanded eligibility and increased partial tax exemptions for certain military retirees.
“Those who served our country in uniform earned their retirement benefits through years of sacrifice and dedication,” Buckson said. “Our military retirees chose service to this nation, and many choose to make Delaware their home after they finish that service. We should be working to welcome them, not discouraging them with outdated tax policy.”
SB 219 now awaits consideration in the Delaware House of Representatives.
