Does Delaware tax pensions and retirement income?
Taxed, with a retirement exclusion
Partly. Delaware taxes pensions, but people 60 or older can exclude up to $12,500 of pension and eligible retirement income each, and those under 60 up to $2,000 of pension income.
In the state's own words
Copied word for word from the official document linked below each quote:
“However, persons 60 years of age or older are entitled to a pension exclusion of up to $12,500 or the amount of the pension and eligible retirement income (whichever is less).”
“If you are under age 60 and receiving a pension, the exclusion amount is limited to $2,000.”
And Social Security?
No. Delaware does not tax Social Security, and it should not be included in your Delaware taxable income. The Delaware Social Security page quotes the rule.
Federal tax still applies
Whatever Delaware does, pensions, annuities and traditional IRA or 401(k) withdrawals are generally taxable on your federal return. See the federal tax brackets and, if you are 73 or older, the required minimum distribution calculator.
State rules change, and the details (age limits, income limits, which plans qualify) matter. Check with the Delaware Division of Revenue before you file or move.
Other states in the same group
Check our work
The answer above comes from this document. Follow the link and compare.
- Personal Income Tax FAQsDelaware Division of Revenue. Read on November 12, 2026.