Delaware Veteran Benefits: What the Statutes Actually Say

Delaware is frequently listed among the states that fully exempt property tax for 100 percent disabled veterans. That is wrong, and it is wrong in a specific way worth understanding before you move: Delaware's benefit covers school property taxes only, which is a large share of a Delaware tax bill but not all of it.

Every figure below is cited to the statute or the state agency that administers it.

Military retirement pay: $25,000 excluded, at any age

Delaware taxes income, with a top marginal rate of 6.6 percent, but excludes a slice of military pension from it.

For tax year 2026 and later, you may exclude up to $25,000 of military pension income at any age. There is no age-60 threshold as there is for Delaware's general pension exclusion. This came from SB 201, enacted in 2022, which phased the amount in: $15,000 for 2024, $20,000 for 2025, and $25,000 for 2026 onward. See Delaware General Assembly SB 201.

One thing to watch: a later bill, SB 219, proposed raising the exclusion further. As of mid-2026 it had not become law, so the $25,000 figure is what applies. If you are reading this well after November 2026, check whether that changed.

Military retirement above $25,000 is taxed as ordinary Delaware income. VA disability compensation is not taxable income at either level.

Property tax: a school tax credit, not an exemption

This is the point most summaries get wrong.

Delaware's benefit is the Disabled Veterans School Property Tax Credit: a 100 percent credit against school property taxes only. Delaware has no separate county or municipal disabled-veteran exemption. See Delaware Department of Finance.

Eligibility:

• A 100 percent permanent and total service-connected rating, or 100 percent due to individual unemployability (TDIU)
• Three years of Delaware legal domicile
• Must be your principal residence

Two things follow from this that matter in practice.

First, TDIU qualifies. That is genuinely useful and often omitted. A veteran at a 70 percent schedular rating who is 100 percent through unemployability is eligible on the same terms.

Second, county and municipal property taxes remain payable in full. School taxes are typically the largest line on a Delaware property tax bill, so the credit is worth real money, but calling it a full property tax exemption overstates it. Delaware's statewide effective property tax rate is about 0.43 percent, among the lowest in the country, so the absolute dollars are smaller than the same benefit would be in a high-rate state.

The three-year domicile requirement is the one to plan around. If you move to Delaware on retirement, you are paying full school taxes for your first three years.

State employment preference

Delaware grants preference points on state government employment exams, per the Delaware Commission of Veterans Affairs:

• 10 points for veterans with a service-connected disability
• 5 points for other eligible veterans

Preference may also be claimed by an unmarried widow or widower, or by the spouse of a qualifying veteran.

Hunting, fishing and state parks

Free hunting, trapping and fishing licenses go to resident veterans with a service-connected disability rated 60 percent or higher. Active-duty members stationed in Delaware also qualify. You submit the Disabled Veterans Exempt Application to Recreational Licensing. See DNREC Division of Fish and Wildlife.

Note the threshold is 60 percent, not 50. Delaware is one of the few states to set it there, so a veteran at 50 percent who qualified for free licenses in a previous state will not here.

State parks give a 50 percent discount on the annual vehicle entrance pass to veterans who served honorably or who are currently serving. No disability rating required.

Vehicles and licenses

Registration fee exemption for adaptive equipment. A motor vehicle owned by a veteran who qualifies for VA adaptive equipment benefits is exempt from registration fees, limited to one automobile at a time, under 21 Del. C. section 2164. VA documentation is required.

Disabled American Veteran plate. Veterans with a certified service-connected disability are eligible for the Delaware DAV plate, and a special DAV handicap-parking plate is also available. Apply with DMV Form MV549DAV plus VA certification.

Veteran indicator on a driver license or state ID, applied for through DMV Driver Services with proof of service.

All three run through Delaware DMV military services.

The state veterans home

The Delaware Veterans Home in Milford is a state-operated skilled nursing and specialized dementia-care facility. It serves eligible veterans who meet federal and state skilled-nursing level-of-care requirements, which is a clinical threshold rather than a residency one. Spouses of veteran residents may also be admitted subject to space.

Education for surviving family

Delaware pays tuition and required fees for up to four years at a state-supported college for children aged 16 to 24 of service members who died, are POW, or are MIA. The child must have been a Delaware resident for three years before applying, and the parent must have been a Delaware resident at the time of death, capture or disappearance. Administered by the Delaware Postsecondary Education Commission, via the Commission of Veterans Affairs.

State-employment preference points also extend to an unmarried widow, widower or spouse.

What the common summaries get wrong

If you are considering Delaware

The real case for Delaware is the combination: a low effective property tax rate, no sales tax, a school tax credit that eliminates the largest line of the property bill at 100 percent or TDIU, and a $25,000 pension exclusion with no age gate. The case against is the three-year domicile wait and the fact that a chunk of military retirement above $25,000 is taxed at up to 6.6 percent.

Compare Delaware against any other state on both dimensions with our State Value Calculator, or see the full picture on the Delaware benefits page.

Sources

• Delaware General Assembly, SB 201 (military pension exclusion)
• Delaware Department of Finance, Disabled Veterans School Tax Credit
• Delaware Commission of Veterans Affairs, benefits
• DNREC Division of Fish and Wildlife, license exemptions
• Delaware DMV, military services
• Delaware Veterans Home, Milford

Figures verified against Delaware statute and state agency pages on 5 November 2026. The military pension exclusion amount is set by statute and has changed every year since 2024, so confirm the current figure before filing. This is general information, not tax or legal advice.