The Short Answer
Active-duty military pay is taxed as regular Delaware income (rates up to 6.6%); verify any pension/exclusion eligibility with the DE Division of Revenue. Your base pay is set by the federal pay table — identical to every other state for your rank and years of service. What actually changes in Delaware is your BAH (averaging $1,800/mo without dependents and $2,200/mo with dependents) and how Delaware treats the taxable portion of your pay.
State tax status: ~ PARTIAL EXEMPT
2026 Worked Example — E-5, 6 Years, With Dependents in Delaware
Here is how the math actually lands for a mid-career enlisted member stationed in Delaware, built the way I read my own LES. Base pay and BAS are federal; the Delaware BAH figure is the state average.
| Monthly line item | Amount | Taxable? |
|---|---|---|
| Base pay (E-5, over 6 yrs) | $3,874 | Yes (federal + state) |
| BAH with dependents (Delaware avg) | $2,200 | No — tax-free |
| BAS (enlisted) | $476.95 | No — tax-free |
| Gross monthly entitlements | $6,550.95 | — |
| Taxable income (base pay only) | $3,874 | — |
| Est. Delaware state income tax | varies — see notes | — |
Only the $3,874 of base pay is taxable — the $2,676.95 of BAH + BAS is completely tax-free. Run your exact rank, ZIP, and dependency status in the Military Pay Calculator for a precise estimate.
How Delaware Taxes Each Type of Military Pay
Active-Duty Base Pay
Active-duty military pay is taxed as regular Delaware income (rates up to 6.6%); verify any pension/exclusion eligibility with the DE Division of Revenue.
Guard & Reserve Drill Pay
Guard and Reserve drill pay is taxed as ordinary income in Delaware.
Military Retirement Pay
Beginning January 1, 2026, Delaware exempts up to $25,000 of military retirement pay for all retirees regardless of age (replacing the prior age-based pension exclusion).
VA Disability Compensation
VA disability compensation is exempt federally and is not taxed by Delaware.
SCRA & Residency in Delaware
A nonresident airman at Dover AFB is shielded from Delaware tax on military pay by SCRA, and an accompanying spouse may claim MSRRA.
This is the single most misunderstood rule in military pay. Your home of record / state of legal residence — not your duty station — generally determines who can tax your military pay. Changing it is a deliberate act, not something that happens automatically when you PCS.
Major Military Installations in Delaware
- Dover Air Force Base
- New Castle Air National Guard Base
BAH is set by the Military Housing Area covering your duty ZIP. Verify your exact rate at the official DoD BAH lookup.
Official Sources
FAQ — Military Pay in Delaware
Does Delaware tax my military base pay?
Active-duty military pay is taxed as regular Delaware income (rates up to 6.6%); verify any pension/exclusion eligibility with the DE Division of Revenue.
Is my BAH taxed in Delaware?
No. BAH is federally tax-free and is never counted as income for Delaware state income tax, regardless of how Delaware treats base pay.
Does Delaware tax military retirement pay?
Beginning January 1, 2026, Delaware exempts up to $25,000 of military retirement pay for all retirees regardless of age (replacing the prior age-based pension exclusion).
I'm stationed in Delaware but my home of record is elsewhere — who taxes me?
A nonresident airman at Dover AFB is shielded from Delaware tax on military pay by SCRA, and an accompanying spouse may claim MSRRA.