How Delaware taxes retirement income
Delaware does not tax Social Security benefits. Pensions and 401(k)/IRA withdrawals are partly taxed (there is an exclusion, then the rest is taxed). Social Security and Railroad Retirement benefits fully excluded from taxable income. Pension and eligible retirement income (401k/IRA withdrawals) is otherwise taxed as ordinary income, subject to an exclusion: residents age 60+ may exclude up to $12,500 of combined pension/eligible retirement income; residents under 60 may exclude up to $2,000 of pension income only.
Retirement income tax in Delaware, at a glance
| Income type | Taxed by Delaware? |
|---|---|
| Social Security | No |
| Pensions | Partially (exclusion applies) |
| 401(k) / IRA withdrawals | Yes |
| Estate / inheritance tax | None |
| Avg. property tax rate | 0.54% of home value |
Does Delaware tax Social Security benefits?
No. Delaware does not tax Social Security benefits.
Does Delaware tax pensions and 401(k) or IRA withdrawals?
Partly. Social Security and Railroad Retirement benefits fully excluded from taxable income. Pension and eligible retirement income (401k/IRA withdrawals) is otherwise taxed as ordinary income, subject to an exclusion: residents age 60+ may exclude up to $12,500 of combined pension/eligible retirement income; residents under 60 may exclude up to $2,000 of pension income only.
For the mechanics of required withdrawals in retirement, see what is an RMD.
Sources
- Delaware taxation of retirement income (Social Security, pensions, 401(k)/IRA): Delaware Department of Revenue / Taxation.