Live in Delaware, Work Remotely for a Illinois Employer: Who Taxes You?
Answer
Your home state takes it and the work state does not. Illinois levies no tax on wages; Delaware taxes residents on all income regardless of where it was earned. The result is a single Delaware resident return covering the full amount, with no offsetting credit.
Last verified
Crossing into a state with no income tax does not lower your tax bill, because your home state is not taxing you on where you work — it is taxing you on where you live. Delaware reaches all of a resident's income, and Illinois adds nothing on top.
What you file
- 1Resident return · Delaware
File a Delaware resident return reporting all of your income.
The two states, side by side
| Delaware | Illinois | |
|---|---|---|
| Taxes wages | Yes — graduated | Yes — flat |
| Reciprocity partners | None | 4 (Form IL-W-5-NR) |
| Convenience rule | Yes — general rule | No |
| Nonresident return | Form PIT-NON | Form IL-1040 with Schedule NR |
| Credit for other-state tax | Schedule I (Form PIT-RES) | Schedule CR |
| Nonresident safe harbour | None published | 30 days |
| Local income tax | Yes | No |
| Revenue department | Delaware Division of Revenue | Illinois Department of Revenue |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Illinois and working in Delaware gives:Convenience-of-the-employer rule — both states tax you.
Same two states, different situation
The withholding answer turns on how you are paid and where the work happens, not only on which two states are involved.
- W-2 commuter: Delaware → IllinoisBoth states — credit offsets the double tax
- 1099 contractor: Delaware → IllinoisHome state, plus the client state if you work there
- Moved mid-year: Delaware → IllinoisTwo part-year returns
Other Delaware pairs
Questions people actually ask
I live in Delaware and work remotely for a Illinois employer. Which state do I pay?
Your home state takes it and the work state does not. Illinois levies no tax on wages; Delaware taxes residents on all income regardless of where it was earned. The result is a single Delaware resident return covering the full amount, with no offsetting credit.
Which state should my employer be withholding for?
Delaware. Your employer should withhold Delaware tax rather than Illinois tax on these wages. If a Illinois line is showing on your pay stub, raise it with payroll now rather than at filing time.
Does my Illinois employer's location alone create a Illinois tax obligation?
No. Illinois sources wages to the place where the work is physically performed, and it does not apply a convenience-of-the-employer rule that would override that. Days you actually spend working inside Illinois are a different matter — those are Illinois-source income and can require a nonresident return.
How current is this?
The Delaware and Illinois rules on this page were last checked against Delaware Division of Revenue and Illinois Department of Revenue on 2026-08-07. We re-check the full grid every December after state legislative sessions close, and re-check the convenience-of-the-employer states quarterly because that is where the rules move fastest.
Sources
Every fact above comes from the revenue department that publishes the rule. We do not cite secondary summaries, and we do not restate a figure we could not find at source.
- Delaware Division of Revenue — individual income taxaccessed 2026-08-07
- Illinois Department of Revenue — individual income taxaccessed 2026-08-07