by Dover, DE – Seniors in Delaware often look for ways to reduce their tax burden, and one of the most valuable tools is the extra standard deduction available to residents aged 65 and older. While the federal government provides a higher standard deduction for older taxpayers, Delaware also has unique provisions that benefit seniors during tax season. Here’s a breakdown of how it works, what qualifies, and how you can maximize your savings.
Federal vs. Delaware Deductions
At the federal level, taxpayers 65 and older qualify for an additional standard deduction amount on top of the regular deduction. For tax year 2025, this federal addition is:
- $1,950 extra for single filers or heads of household
- $1,550 extra per person for married couples when one or both spouses are 65+
Delaware, however, handles deductions differently. Instead of offering a state-level “extra standard deduction” tied directly to age, Delaware provides other senior-specific tax breaks that serve a similar purpose.
Delaware’s Senior Tax Benefits
While Delaware does not have a separate state-level “extra standard deduction,” residents over 65 can benefit from:
- Personal Credit for Seniors – Eligible residents may receive additional credits when filing state taxes.
- Pension Exclusion – Seniors 60 and older can exclude up to $12,500 of eligible pension and retirement income from their taxable income. This includes pensions, Social Security (already tax-free in Delaware), IRA distributions, and certain annuities.
- No State Sales Tax – Though not a deduction, Delaware’s lack of a state sales tax provides indirect savings for retirees on fixed incomes.
These combined benefits help older taxpayers reduce taxable income in ways that function much like an additional deduction.
Who Qualifies?
To take advantage of these benefits, you must:
- Be a Delaware resident
- Be 65 years or older for federal extra deductions
- Be 60 years or older for Delaware’s pension exclusion
- File a Delaware state tax return if your income requires it
Filing Considerations for 2025
When preparing your 2025 return:
- Claim the federal extra standard deduction if you or your spouse are over 65.
- Apply Delaware’s pension exclusion for up to $12,500 of qualified retirement income.
- Remember that Social Security benefits are not taxed in Delaware.
- Combine these savings to potentially reduce both federal and state taxable income significantly.
Why It Matters
For retirees, every dollar counts. Delaware is already one of the most tax-friendly states for seniors, and combining federal and state benefits can result in substantial savings. With no state sales tax, relatively low property taxes, and age-based income exclusions, Delaware ranks high among retirement destinations.
Read Also: Understanding the Colorado Extra Standard Deduction for Seniors Over 65
Summary Table
| Tax Benefit | Federal Provision | Delaware Provision | Eligibility |
|---|---|---|---|
| Extra Standard Deduction | $1,950 (single/HOH) or $1,550 (married, per spouse 65+) | N/A | 65+ |
| Pension Exclusion | N/A | Up to $12,500 of eligible retirement income | 60+ |
| Social Security | Taxed federally (above certain limits) | Not taxed in Delaware | All seniors |
| Sales Tax | Federal N/A | 0% in Delaware | All residents |
Final Thoughts
Delaware seniors over 65 can significantly cut their tax bills by stacking the federal extra standard deduction with state-level exclusions like the pension benefit. Although Delaware does not provide a direct age-based extra deduction, its retirement-friendly tax laws give older residents meaningful savings.
Are you a Delaware senior planning your 2025 taxes? Do you think the pension exclusion goes far enough, or should Delaware add a direct extra deduction like other states? Share your thoughts in the comments at ibwhsmag.com.
