Updated October 4, 2026. Quick answer: Yes, with an exclusion. Delaware taxes 401(k) and IRA withdrawals, but a resident 60 or older on December 31, 2025 can exclude pension and eligible retirement income up to $12,500: “Enter Line 3 or $12,500, whichever is less”. The booklet names “such as IRA, 401(k), Keogh plans, and government deferred compensation plans” as eligible retirement income.
State retirement-income forms, line by line: Delaware PIT-RES pension exclusion.
Inherited an IRA? What the state’s own documents say about taxing those withdrawals: Delaware tax on inherited IRA withdrawals.
Hold a 403(b) or 457(b)? What the state’s own documents say about taxing those withdrawals: does Delaware tax 403(b) and 457(b) withdrawals.
Inheriting from, or planning for, someone in this state? Whether the state has an inheritance tax, from its own tax documents: Does Delaware have an inheritance tax?.
What Delaware does with 401(k) and IRA withdrawals
The booklet adds a rule for early distributions: “that distribution DOES NOT qualify for the pension exclusion”. The statute reads “Amounts received, not to exceed $12,500, by persons age 60 or older”. The retrieved documents do not separately address Roth distributions.
| Item | What the documents say |
|---|---|
| Treatment | Taxable, with a pension exclusion |
| Age 60 or older | Up to $12,500 of pension plus eligible retirement income, including IRA and 401(k) distributions |
| Under 60 | $2,000 for a non-military pension; the booklet does not say a 401(k) withdrawal qualifies |
| State rates | Graduated, 2.2% to 6.6% |
| Source | Delaware Division of Revenue, 2025 PIT-RES instructions; 30 Del. C. sections 1102 and 1106 |
A $40,000 withdrawal
For a resident 60 or older, up to $12,500 of a $40,000 withdrawal is excluded, leaving $27,500 (computed as $40,000 minus $12,500) in Delaware income. The booklet says “Each taxpayer may receive ONLY ONE pension exclusion”, so each spouse has an exclusion of their own.
What changes in 2026
The documents read print no 2026 rate or exclusion change.
Federal rules
The state’s treatment sits on top of the federal one. The IRS explains the federal tax on these withdrawals in Publication 590-B, Distributions from Individual Retirement Arrangements and Publication 575, Pension and Annuity Income.
Related: whether Delaware taxes pensions, how Delaware taxes retirement income, whether Delaware taxes Roth conversions, and the state-by-state table of 401(k) and IRA withdrawal tax.
Find the right next step for your situation
About how much do you have invested? Pick the range that fits; your next step appears immediately below.
Compare vetted advisors for retirement withdrawals
If your portfolio is $250,000 or more, this connects you (free, with no obligation to hire anyone) with 2 to 3 vetted advisors.
Before you start, what actually happens. The matching service is run by WiserAdvisor, an independent advisor-matching company. It opens on their site, asks for your ZIP code and a few questions, and matches you with 2 to 3 vetted advisors. It is free to you.
WiserAdvisor states the service is built for portfolios of $250,000 and above. By submitting, you consent to emails, phone calls and text messages from WiserAdvisor and up to three advisors, so expect to be contacted. Clear Money Guide may earn a referral payment for a qualifying completed form, whether or not you ever hire anyone.
Opens on WiserAdvisor’s site in a new tab.
See how an advisor plans your withdrawals
Price the destination before you decide. The matching service below introduces you to advisers who pay to meet you.
Before you start, what actually happens. The form is run by Kapitalwise, our advisor-matching partner. Kapitalwise sends your details to advisers who pay for the introduction, so expect calls and texts. Clear Money Guide may earn a referral payment through this service, whether or not you ever hire anyone. This is free to you and there is no obligation to hire anyone.
The Kapitalwise form opens here; you stay on this page.
What happens when you press the button
It asks about nine questions: age, investable assets, location; then your name, email and phone number, and verifies the phone by text. Nothing loads and nothing reaches Kapitalwise until you press the button.
Prefer flat-fee or hourly pricing instead? Compare ranges here.
Answer againSources
- Delaware Individual Income Tax Return Resident Instructions 2025 (Form PIT-RES): https://revenuefiles.delaware.gov/2025/PITForms_Instructions/Instructions/PIT-RES_Instructions_2025-01.pdf
- Delaware Code Title 30, Chapter 11, Subchapter II (Resident Individuals), s.1106 Modifications: https://delcode.delaware.gov/title30/c011/sc02/index.html
- Delaware Code Title 30, Chapter 11, Subchapter I, s.1102 Tax imposed: https://delcode.delaware.gov/title30/c011/sc01/index.html
Sources: the primary documents linked above, read on October 4, 2026. General information, not tax advice. Your own facts decide the outcome, and a preparer, the plan administrator or the agency itself is the right place to confirm anything consequential.