Delaware veteran taxes

Military retired pay in Delaware

Partly exempttax year 2025Sources 1, 2

For tax year 2025, a military retiree under age 60 may exclude $12,500 or the amount of the U.S. military pension, whichever is less; at age 60 or older the general exclusion of up to $12,500 of pension and eligible retirement income applies. Under 30 Del. C. § 1106(b)(3), the U.S. military pension limit rises to $15,000 for tax year 2027, $20,000 for 2028 and $25,000 from 2029, at any age. The limits apply separately to each spouse receiving a military pension on a joint return. The Code also limits the subtraction for persons 60 or older to those domiciled in Delaware at least 3 years (5 years if domiciled on or after January 1, 2027); the section text gives no start date for this, and the 2025 instructions don’t mention it.

Survivor Benefit Plan annuities

Check with the stateSources 3, 2

Delaware’s instructions and Code do not name Survivor Benefit Plan annuities. The pension exclusion covers pensions from employers including pensions of a deceased taxpayer, and the military figure applies to a United States military pension, defined as a pension received as a result of an individual’s service; neither source says whether a survivor’s SBP annuity counts as a military pension.

Property tax relief for disabled veterans

Exemption or creditSources 4, 5

Delaware’s Disabled Veterans School Property Tax Credit, available since 2022, is a credit against 100% of non-vocational school district property tax on a primary residence. It is for veterans who receive 100% disability compensation for a service-connected permanent and total disability based on individual unemployability, or who have a 100% VA disability rating, and who have held legal domicile in Delaware for the past 3 years. Applications go to the county by April 30; once approved, no yearly reapplication is needed at the same home.

• Credit: 100% of non-vocational school district property tax on the primary residence; the Department names no credit against vocational school district or county taxes.
• It cannot be combined with the Senior School Property Tax Credit, and the property tax bill must be paid in full each year to keep the credit for the next year.

Vehicle registration for disabled veterans

Fee waiver or discountSources 6, 7, 8

Under 21 Del. C. § 2164, a motor vehicle owned by a veteran with a disability who has ever been eligible for VA automobile benefits under 38 U.S.C. § 1901 et seq. is exempt from registration fees, limited to one automobile per veteran at a time, with plates furnished without cost. Other veterans with a VA service-connected disability may get a special disabled veteran (DAV) plate under § 2138, which carries no fee beyond the annual registration fee but a $10 administrative fee on the original application.

• Registration fee exemption: one automobile, veterans ever eligible for benefits under 38 U.S.C. § 1901 et seq.; inspection still required (§ 2164).
• DAV plate (§ 2138): passenger vehicle or truck of 3/4 ton or less; a surviving spouse may transfer the plate to the spouse’s own vehicle.