Tags: Retirement | retirement in delaware

Taxes for Retirees in Delaware

By    |   Wednesday, 06 Jan 2016 07:46 PM

Although it may not seem like an obvious choice for a retirement location, Delaware offers some pretty enticing retirement benefits, not the least of which is Delaware's desirable tax system.

Collected here are some noteworthy tax considerations for those considering retirement in the First State.

1. Sales Tax

Delaware is one of only five states in the union to have no sales tax. Alaska, New Hampshire, Oregon, and Montana are the other four states that are free from sales tax.

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It should be noted that Delaware does impose a gross receipts tax on the seller of goods or provider of services.

While there is no general sales tax, Delaware does place a tax on gasoline as well as cigarettes.

2. Social Security Taxes

Like many other states, Delaware does not tax Social Security income. Railroad retirement benefits are also exempt in this state.

3. Pension Income

For taxpayers older than the age of 60, $12,500 of investment and qualified pension income can be excluded. This rule also applies to out-of-state government pensions.

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Additionally, these individuals may qualify for a tax credit of $110. For those age 60 or younger, only $2,000 are exempt from being taxed.

4. Retired Military Pay

Like pension income, retired military pay qualifies for some exemptions in Delaware. It is also $2,000 for retirees less than age 60 and $12,500 for those age 60 and up.

Military disability retired pay is also exempt as it is covered by federal law, which allows for the exemption. Some other forms of military pay may be subject to state taxes.

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Veterans Administration benefits are also nontaxable.

5. Property Taxes

Real property in the state of Delaware is subject to property taxes including county, school district, vocational school district, and municipal property taxes.

Senior homeowners ages 65 and older may qualify for the senior school property tax credit up to as much as $500.

6. Inheritance and Estate Taxes

For deaths occurring between July 1, 2009 and July 1, 2013, Delaware did bring back its estate tax.

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Although it may not seem like an obvious choice for a retirement location, Delaware offers some pretty enticing retirement benefits, not the least of which is Delaware's desirable tax system. Collected here are some noteworthy tax considerations for those considering retirement in the First State.
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2016-46-06
Wednesday, 06 Jan 2016 07:46 PM
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