Updated October 30, 2026. Quick answer: Partly. Delaware does not single out federal civil service retirees. The statute allows “Amounts received, not to exceed $12,500, by persons age 60 or older” and “Amounts received, not to exceed $2,000, by persons under age 60”, and it lists pensions from the United States alongside employer and State pensions. A person 60 or older must also have been legally domiciled in Delaware for at least 3 years, or 5 years if the domicile began on or after January 1, 2027.
What Delaware does with a FERS or CSRS annuity
| Question | What the Delaware documents say |
|---|---|
| What the source says | Delaware has no separate federal civil service rule; the statute lists pensions from the United States alongside employer, State and local pensions as eligible for the same capped pension exclusion, and the 2025 instructions apply that exclusion to pensions from employers without naming CSRS or FERS. |
| Amount or limit | A pension exclusion of up to $12,500 for filers age 60 or older (pension plus eligible retirement income combined, one exclusion per taxpayer); up to $2,000 for filers under 60 with a non-military pension. |
| Age or other test | Age 60 or older on December 31, 2025 for the $12,500 limit; under 60 gets the $2,000 limit for a non-military pension. |
| Change for 2026 | The statute requires a person age 60 or older to have been legally domiciled in Delaware for at least 3 years if domiciled there before January 1, 2027, or at least 5 years if domiciled there on or after that date; the 2025 instructions do not mention this. No other 2025 to 2026 change for non-military pensions is printed in the state documents cited here. |
In the Delaware documents’ own words
- “as pensions from employers, the United States, this State” (Delaware Code Title 30, Section 1106 (Modifications to Delaware taxable income))
- “Amounts received as pensions from employers (including pensions of a deceased taxpayer)” (2025 Resident Individual Income Tax Return Instructions (PIT-RES))
- “Each taxpayer may receive ONLY ONE pension exclusion” (2025 Resident Individual Income Tax Return Instructions (PIT-RES))
How this differs from other pensions in Delaware
A federal pension is treated the same as a private employer pension or a State pension under the statute: all fall under one shared cap, with no separate or larger exemption for federal civil service retirees. See also Does Delaware tax pensions? and military retirement pay.
FERS, CSRS and your TSP
The 2025 instructions count distributions from qualified retirement plans such as IRA, 401(k) and Keogh plans as eligible retirement income that shares the same $12,500 cap, but they do not name TSP. For the Thrift Savings Plan itself, see state tax on TSP withdrawals and the TSP calculator.
Where this rule sits on the Delaware return
The exclusion is in Delaware Code Title 30, section 1106, and is claimed on the resident return; the instructions say each taxpayer may use one pension exclusion.
Checks before you rely on this answer
- Find your age on December 31 of the tax year, because it sets the cap at $12,500 or $2,000.
- Add your pension to other eligible retirement income before applying the cap, since the cap is shared.
- On a joint return, apply the exclusion to each spouse separately, because it is per taxpayer.
- If you are 60 or older, confirm how long you have been legally domiciled in Delaware, because the statute makes the age 60 subtraction depend on it.
What the Delaware documents leave open
The documents do not name CSRS or FERS, so the federal rule rests on the statute phrase pensions from the United States. State rates were not read, the 2025 instructions do not mention the statute’s domicile condition or TSP by name, and no 2026 booklet exists yet.
Common mistakes
- Expecting a larger federal exemption. A federal pension shares one cap with employer and State pensions.
- Using the cap twice. Each taxpayer may receive only one pension exclusion.
Related: Does Delaware tax pensions?, Delaware military retirement pay, Delaware retirement deduction line by line, and FERS, TSP and Social Security sequencing.
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Answer againSources
- Delaware Code Title 30, Section 1106 (Modifications to Delaware taxable income): https://delcode.delaware.gov/title30/c011/sc02/index.html
- 2025 Resident Individual Income Tax Return Instructions (PIT-RES): https://revenuefiles.delaware.gov/2025/PITForms_Instructions/Instructions/PIT-RES_Instructions_2025-01.pdf
Read from the state documents linked above on October 30, 2026. General information, not tax advice.