Delaware
Military Benefits

Military Pay & State Income Tax

Delaware taxes military pay for residents but provides a pension and retirement income exclusion of up to $12,500 that directly benefits military retirees. No sales tax statewide is a major everyday financial advantage.

Delaware taxes military base pay for servicemembers who are legal residents of Delaware, regardless of where they are stationed. Delaware has a graduated income tax ranging from 2.2% to 6.6%. Servicemembers stationed outside Delaware on orders may have grounds to change domicile, but merely being stationed elsewhere does not create a Delaware exemption on its own. Consult the Delaware Division of Revenue for guidance on domicile change procedures.

Delaware excludes up to $12,500 of pension and retirement income from state income tax for individuals age 60 and older. Military retirement pay qualifies for this exclusion. For retirees under age 60, a different exclusion of up to $2,000 may apply to military pension income. Claim the exclusion on your Delaware Form 200-01 Individual Resident Income Tax Return. Contact the Delaware Division of Revenue at (302) 577-8200 for specific eligibility.

VA disability compensation is fully exempt from Delaware state income tax. This is a federal-level exemption that Delaware honors automatically, no separate form is required. This applies to all disability ratings including partial compensation.

Delaware does not provide a broad state income tax exemption for National Guard or Reserve drill pay and annual training pay. Pay received during state active duty orders called up by the Governor may be treated differently. Guard and Reserve members should consult the Delaware Division of Revenue or a military-aware tax professional regarding their specific pay situation.

Under the Veterans Benefits and Transition Act of 2018, military spouses who maintain domicile in another state do not owe Delaware income tax on wages earned in Delaware while accompanying their servicemember on military orders. File for a refund if Delaware taxes were withheld from your wages. Keep a copy of the servicemember's current orders and your own domicile documentation.

Delaware has no state or local sales tax. This is one of only five states in the nation with no sales tax. For military families, this means no sales tax on vehicles, electronics, clothing, furniture, and all other consumer purchases made in Delaware. For a family spending $40,000 annually on taxable goods, this can represent $3,000 to $4,000 in annual savings compared to high-tax states. This benefit applies to everyone in Delaware regardless of military status.

Property Tax Exemptions & Discounts

Delaware provides a 100% property tax exemption for veterans with a total service-connected disability rating. The exemption is administered at the county level.

Delaware veterans who are rated 100% totally and permanently disabled due to service-connected injury or illness receive a complete real property tax exemption on their primary residence. Apply through your county assessment office with your VA award letter showing 100% total disability, your DD-214, and proof of primary residence. The exemption is renewable and must be updated if your VA rating changes.

The surviving spouse of a qualifying 100% disabled veteran may retain the property tax exemption as long as they remain unmarried and continue to occupy the property as their primary residence. The surviving spouse must apply to maintain the exemption after the veteran's death and provide documentation of the veteran's qualifying disability rating.

Delaware offers a property tax credit for qualifying senior citizens and disabled individuals. Military retirees who meet age and income requirements may qualify for this credit in addition to or in lieu of the veteran-specific exemption. Contact your county assessment office for current income thresholds and application procedures.

Property tax exemptions in Delaware are administered at the county level. New Castle County, Kent County (home to Dover AFB), and Sussex County each have their own assessment offices. Kent County Assessment: (302) 744-2401. New Castle County Assessment: (302) 395-5520. Sussex County Assessment: (302) 855-7824. Contact your county office before applying.

Vehicle Registration & Driver's License

Delaware's no-sales-tax advantage extends to vehicle purchases, making it one of the lowest-cost states for buying a car. SCRA protections apply for home-state registration.

Delaware charges no sales tax on vehicle purchases. Servicemembers buying a car while stationed at Dover AFB or New Castle ANG Base pay no sales tax on the transaction. For a $35,000 vehicle, this saves $2,000 to $3,500 compared to purchases in neighboring Pennsylvania, Maryland, or New Jersey. Delaware does charge a document fee and a modest title and registration fee, but no percentage-based sales tax.

Active duty servicemembers are not required to register their vehicles in Delaware while stationed here under SCRA. You may keep home-state plates and registration. Delaware DMV cannot require registration based solely on military orders. Keep a copy of your current orders in your vehicle and renew your home-state registration on schedule.

Delaware offers specialized license plates for disabled veterans and Purple Heart recipients. Some plate categories include fee waivers. Contact Delaware DMV at (302) 744-2506 or dmv.de.gov for current plate options and eligibility requirements based on VA disability rating.

Delaware driver's licenses for servicemembers and dependents stationed outside Delaware do not expire while on active duty orders. The license remains valid during the period of active duty. Upon returning to Delaware or separating from service, contact Delaware DMV promptly to renew.

Military spouses may maintain their home-state vehicle registration and driver's license while residing in Delaware on military orders. Delaware cannot require a spouse to obtain a Delaware license or DE plates based solely on residence in the state while accompanying their servicemember.

Military Spouse Employment & Licensing

Delaware has enacted license reciprocity provisions for military spouses, allowing faster professional license transfers without repeating full licensing requirements.

Delaware law provides an expedited pathway for military spouses holding a valid professional license from another state to obtain a Delaware license. The military spouse must be in good standing in their prior state and must accompany their servicemember on military orders to Delaware. Covered professions include nursing, real estate, cosmetology, mental health, and others regulated by Delaware's Division of Professional Regulation. Contact the Division at (302) 744-4500 for board-specific requirements.

While a full license application is pending, some Delaware licensing boards may issue a temporary authorization to practice in the licensed profession. Request this explicitly when submitting your application with orders. This prevents income gaps during the transfer period. Not all boards offer this option, confirm with the specific board overseeing your profession.

Delaware law provides that a military spouse who voluntarily leaves employment in Delaware to accompany their servicemember on PCS orders is eligible for Delaware unemployment benefits. They are not considered to have quit without good cause. The spouse must have worked in Delaware prior to the PCS move. File through the Delaware Department of Labor at dol.delaware.gov.

A military spouse who maintains domicile in another state and works remotely for an out-of-state employer while living in Delaware on military orders may be exempt from Delaware income tax on those wages. Delaware-source income such as wages from a Delaware employer or clients physically in Delaware may still be taxable. Consult a military-aware CPA familiar with Delaware tax law to structure remote work arrangements correctly.

The Delaware Small Business Development Center (SBDC) at the University of Delaware provides free counseling and resources for entrepreneurs including military spouses starting businesses in Delaware. Contact the SBDC at (302) 831-1555 or delawaresbdc.org. SCORE Delaware also provides free mentoring for military spouse business owners.

SCRA, Federal Protections That Apply in Delaware

Delaware courts and landlords are required to honor all federal SCRA protections. Dover AFB's legal office serves as the primary JAG resource for the state.

You can terminate any Delaware residential lease with 30 days' written notice upon receiving PCS orders or a deployment of 90 or more days. Deliver written notice and a copy of your orders to the landlord. Termination is effective 30 days after the next rent due date following delivery of notice. Delaware landlords cannot charge early termination fees to servicemembers exercising SCRA rights.

Any debt taken on before entering active duty, including mortgages, car loans, credit cards, and student loans, must be reduced to 6% interest upon written request. Submit written notice and a copy of orders to the creditor. The cap applies retroactively, excess interest above 6% is forgiven rather than deferred. Delaware lenders familiar with Dover AFB are generally experienced with this requirement.

Delaware courts cannot foreclose on a servicemember's primary residence during active duty without a court order. The protection extends for 9 months after separation or release from active duty. Delaware uses a judicial foreclosure process, which means any foreclosure attempt requires a court filing, giving servicemembers natural notice and time to respond.

Landlords cannot evict an active duty servicemember or their family from a primary residence without a court order when rent is within the SCRA threshold (adjusted annually for CPI). Delaware courts are required to stay eviction proceedings for up to 90 days upon a servicemember's request when military service materially affects their ability to appear.

Delaware courts must grant at least a 90-day stay of civil proceedings when a servicemember cannot appear due to military duties. Courts cannot enter a default judgment against an active duty servicemember without a hearing and, in some cases, appointment of an attorney to represent the servicemember's interests.

Education Benefits in Delaware

Delaware provides strong in-state tuition protections for military families and several Yellow Ribbon participating schools, with particular strengths at institutions near Dover AFB.

Delaware law grants in-state tuition eligibility to active duty servicemembers stationed in Delaware, their spouses, and dependents, without a 12-month waiting period. This applies to the University of Delaware, Delaware State University, and Delaware's community college system. Bring current orders and state a Delaware address when applying.

University of Delaware participates in the Yellow Ribbon Program, covering tuition and fees above the state cap at no additional cost for eligible veterans at 100% GI Bill tier. Wilmington University is a Military Friendly school with strong online program enrollment by military students and also works with GI Bill benefits. Verify current Yellow Ribbon participation at benefits.va.gov/GIBILL before enrolling.

Delaware National Guard members may be eligible for state tuition assistance to supplement federal Montgomery GI Bill-Selected Reserve benefits. The Delaware National Guard Education Office can provide current program details and application procedures. Contact the Delaware National Guard at (302) 326-7000 for education office referral.

Dependent children who establish domicile in Delaware and begin enrollment at a Delaware public university do not automatically lose in-state tuition if their active duty parent PCSes out of Delaware. Continuous enrollment and maintenance of Delaware domicile by the student are typically required. Confirm with the specific institution's registrar when the parent's PCS orders arrive.

The Delaware Division of Veterans Affairs connects veterans with vocational rehabilitation, education benefits navigation, and GI Bill counseling. Contact the Delaware DVA at (302) 739-2792 or veteransaffairs.delaware.gov. DVA benefits counselors can review your eligibility for multiple education benefit programs and help you choose the best option for your situation.

Voting & Residency Rights

Delaware must honor your right to maintain home-state domicile and vote by absentee ballot. Delaware installations have Voting Assistance Officers to assist.

Being stationed in Delaware does not change your legal domicile. You may continue to vote in your home state via absentee ballot under the Uniformed and Overseas Citizens Absentee Voting Act (UOCAVA). Submit a Federal Post Card Application (FPCA) at FVAP.gov. Your installation's Voting Assistance Officer (VAO) at Dover AFB or New Castle ANG Base can help you complete and submit your FPCA.

If you want to vote in Delaware and claim it as your home state, register at ivote.delaware.gov. Delaware has a state income tax with a top rate of 6.6%. If your current home state has no income tax, such as Florida, Texas, or Washington, carefully weigh the financial implications before switching domicile to Delaware.

Military spouses may independently maintain domicile in any state they choose under the Veterans Benefits and Transition Act of 2018. It does not have to match the servicemember's domicile. Delaware cannot force a spouse to establish Delaware domicile based solely on their physical presence in the state while accompanying their servicemember.

Delaware accepts the FPCA as both a voter registration and absentee ballot request. Ballots are available electronically to overseas and deployed voters. Delaware accepts electronic return of ballots from UOCAVA voters. Request your ballot at least 45 days before any federal election to ensure timely delivery and return.