If you receive a Survivor Benefit Plan, Reserve Component Survivor Benefit Plan or Retired Serviceman’s Family Protection Plan annuity, you can exclude up to $12,500 of it from Delaware taxable income once you are 60 or older. Under 60 the exclusion is $2,000. A further $2,000 can be excluded by a survivor who has a permanent disability, had earned income under $2,500 in the tax year, and has adjusted gross income of $10,000 or less.
There is nothing to apply for. Claim the pension exclusion on your Delaware personal income tax return, following the Delaware Division of Revenue instructions for pension and eligible retirement income.
Your Form 1099-R showing the annuity payments, and documentation of a permanent disability if you are claiming the additional $2,000 exclusion.
