DE SB188

Increases the pension exclusion for military retirees under age 60 from $2,000 to $12,500 for Delaware state income tax purposes.

Military pensioners under age 60 may claim the greater amount between the standard $2,000 pension exclusion or the $12,500 military pension exclusion.

Maintains the $12,500 pension exclusion cap for persons age 60 or older, which includes military pensions, employer pensions, and eligible retirement income.

Defines "eligible retirement income" to include distributions from qualified retirement plans, 401(k) plans, government deferred compensation plans, and investment income from dividends, capital gains, and rental income.

Effective for tax years beginning on or after January 1, 2022.