Live in Delaware, Work Remotely for a Michigan Employer: Who Taxes You?
Answer
Delaware taxes the income and Michigan cannot. Residency, not the location of the job, drives this answer: Delaware reaches all of a resident's income, and Michigan has no personal income tax to apply to the part earned inside its borders.
Last verified
The instinct that working in a no-tax state means paying no tax is the single most expensive misunderstanding in this niche. Michigan takes nothing, but Delaware still taxes residents on income earned anywhere, so the full amount lands on your Delaware return.
Michigan also has a layer below the state one, and it is the layer that survives every agreement: Two dozen Michigan cities levy their own income tax, Detroit among them, and the state reciprocal agreements do not cover city tax. A reciprocal-state resident working in Detroit still owes Detroit.
What you file
- 1Resident return · Delaware
File a Delaware resident return reporting all of your income.
The two states, side by side
| Delaware | Michigan | |
|---|---|---|
| Taxes wages | Yes — graduated | Yes — flat |
| Reciprocity partners | None | 6 (Form MI-W4) |
| Convenience rule | Yes — general rule | No |
| Nonresident return | Form PIT-NON | Form MI-1040 with Schedule NR |
| Credit for other-state tax | Schedule I (Form PIT-RES) | Form MI-1040 (credit for income tax imposed by another state) |
| Nonresident safe harbour | None published | None published |
| Local income tax | Yes | Yes |
| Revenue department | Delaware Division of Revenue | Michigan Department of Treasury |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Michigan 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 → MichiganBoth states — credit offsets the double tax
- 1099 contractor: Delaware → MichiganHome state, plus the client state if you work there
- Moved mid-year: Delaware → MichiganTwo part-year returns
Other Delaware pairs
Questions people actually ask
I live in Delaware and work remotely for a Michigan employer. Which state do I pay?
Delaware taxes the income and Michigan cannot. Residency, not the location of the job, drives this answer: Delaware reaches all of a resident's income, and Michigan has no personal income tax to apply to the part earned inside its borders.
Which state should my employer be withholding for?
Delaware. Your employer should withhold Delaware tax rather than Michigan tax on these wages. If a Michigan line is showing on your pay stub, raise it with payroll now rather than at filing time.
Does my Michigan employer's location alone create a Michigan tax obligation?
No. Michigan 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 Michigan are a different matter — those are Michigan-source income and can require a nonresident return.
How current is this?
The Delaware and Michigan rules on this page were last checked against Delaware Division of Revenue and Michigan Department of Treasury 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
- Michigan Department of Treasury — individual income taxaccessed 2026-08-07