Del. Senate passes tax relief bills for retired military members, first responders

DOVER, Del. – The Delaware State Senate on Tuesday unanimously passed two bills that will provide tax relief to thousands of retired service members and first responders living in the state.

Senate Substitute 1 for Senate Bill 188 would exclude up to $12,500 worth of military pension income from state tax calculations for all retired service members, regardless of age, starting in 2023. Currently, 26 states that tax personal income completely excludes military pensions from their taxable income calculations. Nine others, including Delaware, offer partial tax exemptions. Under the current state law, a $12,500 pension exclusion is only available to residents over the age of 60. Younger retirees, including retired serve members, are only eligible for a $2,00 pension exclusion.

The Senate also passed legislation on Tuesday to double the state tax credit available to active members of volunteer fire, ambulance, and rescue service companies. Senate Bill 189 would increase the credit against the income tax liability available to resident first responders from $500 to $1,000. This adjustment was recommended by the Volunteer Firefighter Recruitment and Retention Task Force and is the second measure recommended by the task force to pass the Senate. Back in September, Governor John Carney signed House Bill 249, which created a tuition reimbursement program for volunteer firefighters, similar to previously existing programs for police officers and National Guard members.

Both bills now head to the House of Representatives for final consideration.