Younger veterans living in Delaware will receive extra tax relief if a bill passed by the Delaware Senate continues its trajectory.
Senate Substitute No. 1 to SB188 increases the non-taxable amount of a military retiree under age 60 from $2,000 to $12,500, matching the amount for those over 60 years old.
Sponsor state Senator Spiros Mantzavinos (D-Elsmere/Pike Creek) said the goal was to make Delaware more competitive with regional states.
“It offers those who are separating, and who are in their late 30s and early 40s an incentive to begin their second careers in Delaware. These women and men have skills and experiences that are in high demand in Delaware. From leadership, to health care — as we saw during the pandemic –, to logistics, to management, and more.”
The U.S. Department of Veterans Affairs reported in 2017 where were 71,845 veterans, of which 9,106 were retirees.
According to the Department of Finance, 1,529 people under the age of 60 received military income in 2018, with the majority receiving pension income over $12,500.
Mantzavinos said it’s worth paying the estimated $1.4 million in lost revenue.
“Delaware offers many benefits to everyone who retires here, and I recognize, and I think we all should, that Delaware could and should be doing more to compete with other states by taking into account the specific needs of our veterans.”
State Sen. Colin Bonini (R-Dover) joined Mantzavinos in hoping this is just the start of a ladder that leads to making the income entirely tax-exempt.
“It’s a great first step. Some day, and I think some day soon, we’ll be able to exempt all military pensions. It is absolutely the right thing to do. Hopefully this will send a message to the little bit younger veterans that Delaware is open for business, and please come.”
SB188’s next step is to the state house.