Updated October 30, 2026. Quick answer: Only if you live there. Delaware’s nonresident return tells filers to enter “taxable pensions and annuities received while a” resident of Delaware in Column B, the Delaware source column, while residents may exclude up to $12,500 of pension and eligible retirement income at age 60 or older.
How Delaware treats a pension earned elsewhere
| Item | What the state documents say |
|---|---|
| Nonresidents | The Form PIT-NON instructions require a nonresident to file only when there is gross income from sources in Delaware, and Column B lists Delaware source income. For taxable pensions and annuities, the Column B instruction directs the filer to enter amounts received while a resident of Delaware. This rests on the 2025 PIT-NON instructions, lines for Who Must File and Line 9. |
| Residents with a pension earned elsewhere | Delaware residents file Form PIT-RES. A resident under 60 with a non-military pension may exclude $2,000 or the amount of the pension, whichever is less, and a military retiree under 60 may exclude $12,500 or the pension, whichever is less. At age 60 or over the exclusion is the pension plus eligible retirement income, capped at $12,500, with one exclusion per taxpayer. Social Security and Railroad retirement benefits are excluded from Delaware taxable income. An early distribution from an IRA or pension fund for emergency reasons or following a separation from employment does not qualify, and neither does a distribution with code 1 in Box 7 of Form 1099-R or one that drew an early withdrawal penalty on the federal return. The instructions do not limit the exclusion by the state where the pension was earned. The source says: “Enter Line 3 or $12,500, whichever is less”. This rests on the 2025 PIT-RES resident instructions. |
| Part-year residents (year of a move) | A part-year resident must file if there was income from any source while a resident or income from a Delaware source while a nonresident, and may choose the resident return or the nonresident return. On Form PIT-NON, Column B includes all income from any source during the period of Delaware residency, after income is allocated by date. The source says: “Part-year residents may elect to file either a resident or non- resident”. This rests on the PIT-RES and PIT-NON instructions for part-year residents. |
| Rate | Title 30, section 1102(a)(14) of the Delaware Code sets the graduated rates for taxable years after 2013, from 2.2% on taxable income over $2,000 but not over $5,000 up to 6.6% on taxable income over $60,000. The source says: “6.6% of taxable income in excess of $60,000”. |
| Return to file | Full-year residents file Form PIT-RES. Part-year residents and nonresidents file Form PIT-NON, and a part-year resident may instead elect the resident return. |
A $40,000 move-year example
A retiree receives $40,000 of pension in the year of a move: $20,000 before the move date, as a Delaware resident, and $20,000 after leaving.
The first $20,000 can be taxed by Delaware; the rest is outside its reach under the federal rule below. Taxed wholly at the lowest printed rate, 2.2%, the tax on it is computed as $20,000 x 0.022 = $440; taxed wholly at the highest, 6.6%, it is computed as $20,000 x 0.066 = $1,320. The real figure falls between these bounds before any exclusion or credit. Federal tax still applies.
The federal rule that protects a nonresident
4 U.S.C. 114(a) bars a state income tax on retirement income of an individual “who is not a resident or domiciliary of such State”. Retirement income means any income from a qualified retirement plan, a simplified employee pension, a 403(a) or 403(b) plan, an individual retirement plan, an eligible 457 plan, a governmental plan or a trust described in section 501(c)(18) of the Internal Revenue Code. Income from a nonqualified deferred compensation plan counts only if it is part of a “series of substantially equal periodic payments” made for life or for a period of at least 10 years, or is a payment after termination of employment from a plan that exists only to provide benefits above the Internal Revenue Code limits, so not every payment is covered. Retired pay of a member of a uniform service is also covered.
Related: how Delaware taxes retirement income, whether Delaware taxes pensions, California to Delaware retirement taxes, District Of Columbia to Delaware retirement taxes, out-of-state pension tax by state, and deferred compensation lump sums after a move.
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Answer againSources
- 2025 PIT-RES Resident Instructions (Delaware Division of Revenue): https://revenuefiles.delaware.gov/2025/PITForms_Instructions/Instructions/PIT-RES_Instructions_2025-01.pdf
- 2025 PIT-NON Non-Resident Instructions (Delaware Division of Revenue): https://revenuefiles.delaware.gov/2025/PITForms_Instructions/Instructions/PIT-NON_Instructions_2025-01.pdf
- Delaware Code Title 30, Chapter 11, Subchapter I, section 1102 (Delaware General Assembly): https://delcode.delaware.gov/title30/c011/sc01/index.html
- 4 U.S.C. 114, Limitation on State income taxation of certain pension income (U.S. Government Publishing Office, 2023 edition): https://www.govinfo.gov/content/pkg/USCODE-2023-title4/html/USCODE-2023-title4-chap4-sec114.htm
Sources: the primary documents linked above, read on October 30, 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.