Live in Delaware, Work Remotely for a New York Employer: Who Taxes You?
Answer
This is the remote-work trap. New York reaches your at-home workdays through its convenience rule, Delaware reaches them because you live there, and the Delaware credit is capped at the Delaware tax on that income — so if New York charges more, the excess is not recoverable.
Last verified
The convenience rule asks a question that no other sourcing rule asks: not where you worked, but why you worked there. If the answer is your own preference, New York treats the day as a New York workday no matter where the desk actually was.
New York runs the oldest and most aggressive convenience-of-the-employer rule. A nonresident employee of a New York employer is taxed on every workday performed at home unless the home office meets New York's bona fide employer office test, which is deliberately hard to satisfy. Working remotely because you prefer to is convenience; working remotely because the job cannot be done in New York is necessity.
The rule is not an administrative preference. New York applies it under 20 NYCRR §132.18(a); TSB-M-06(5)I, and the burden of showing that remote work is an employer necessity rather than an employee convenience falls on you and your employer, not on New York State Department of Taxation and Finance.
A Delaware resident taxed by another state on the same income claims the credit for taxes paid to other states on Schedule I (Form PIT-RES). The credit is capped at the Delaware tax on that income, so it removes the double tax but never refunds the excess when the other state charges more.
New York also has a layer below the state one, and it is the layer that survives every agreement: New York City levies a resident income tax, and Yonkers levies both a resident tax and a small nonresident earnings tax. New York City has not taxed nonresident commuters since the commuter tax was repealed in 1999 — a New Jersey or Connecticut resident working in Manhattan owes New York State but not New York City.
What you file
- 1Nonresident return · New YorkForm IT-203
File the New York nonresident return FIRST — you need the New York tax figure before you can complete Delaware.
- 2Resident return · DelawareSchedule I (Form PIT-RES)
File a Delaware resident return reporting all income, then claim the credit for tax paid to New York. The credit is capped at what Delaware would have charged on that same income, so if New York taxes it at a higher rate the difference is not refunded.
The two states, side by side
| Delaware | New York | |
|---|---|---|
| Taxes wages | Yes — graduated | Yes — graduated |
| Reciprocity partners | None | None |
| Convenience rule | Yes — general rule | Yes — general rule |
| Nonresident return | Form PIT-NON | Form IT-203 |
| Credit for other-state tax | Schedule I (Form PIT-RES) | Form IT-112-R |
| Nonresident safe harbour | None published | None published |
| Local income tax | Yes | Yes |
| Revenue department | Delaware Division of Revenue | New York State Department of Taxation and Finance |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in New York 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 → New YorkBoth states — credit offsets the double tax
- 1099 contractor: Delaware → New YorkHome state, plus the client state if you work there
- Moved mid-year: Delaware → New YorkTwo part-year returns
Other Delaware pairs
Questions people actually ask
I live in Delaware and work remotely for a New York employer. Which state do I pay?
This is the remote-work trap. New York reaches your at-home workdays through its convenience rule, Delaware reaches them because you live there, and the Delaware credit is capped at the Delaware tax on that income — so if New York charges more, the excess is not recoverable.
Which state should my employer be withholding for?
Both, potentially — and that is the problem. New York expects withholding because it claims the income, while Delaware taxes you as a resident. Many employers withhold only for New York, which leaves a Delaware balance due at filing unless you make estimated payments during the year.
Will I end up paying tax twice on the same income?
Not twice over, but you will pay the higher of the two rates. Delaware gives residents a credit for tax paid to New York on the same income, claimed on Schedule I (Form PIT-RES). The credit is capped at the Delaware tax on that income, so if New York taxes it more heavily the excess is not refunded by either state.
How current is this?
The Delaware and New York rules on this page were last checked against Delaware Division of Revenue and New York State Department of Taxation and Finance 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
- New York State Department of Taxation and Finance — individual income taxaccessed 2026-08-07