Live in Delaware, Work Remotely for a Tennessee Employer: Who Taxes You?
Answer
Delaware gets all of it. Because Tennessee does not tax wage income, no Tennessee withholding exists and no Tennessee return is required — but Delaware taxes residents on worldwide income, so every dollar earned in Tennessee still belongs on your Delaware resident return.
Last verified
The instinct that working in a no-tax state means paying no tax is the single most expensive misunderstanding in this niche. Tennessee takes nothing, but Delaware still taxes residents on income earned anywhere, so the full amount lands on your Delaware return.
What you file
- 1Resident return · Delaware
File a Delaware resident return reporting all of your income.
The two states, side by side
| Delaware | Tennessee | |
|---|---|---|
| Taxes wages | Yes — graduated | No |
| Reciprocity partners | None | None |
| Convenience rule | Yes — general rule | No |
| Nonresident return | Form PIT-NON | Not applicable |
| Credit for other-state tax | Schedule I (Form PIT-RES) | No income tax |
| Nonresident safe harbour | None published | Not applicable |
| Local income tax | Yes | No |
| Revenue department | Delaware Division of Revenue | Tennessee Department of Revenue |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Tennessee and working in Delaware gives:Convenience-of-the-employer rule — employer state taxes 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 → TennesseeHome state only
- 1099 contractor: Delaware → TennesseeHome state only — estimated payments
- Moved mid-year: Delaware → TennesseeOne part-year return — the state you left
Other Delaware pairs
Questions people actually ask
I live in Delaware and work remotely for a Tennessee employer. Which state do I pay?
Delaware gets all of it. Because Tennessee does not tax wage income, no Tennessee withholding exists and no Tennessee return is required — but Delaware taxes residents on worldwide income, so every dollar earned in Tennessee still belongs on your Delaware resident return.
Which state should my employer be withholding for?
Delaware. Your employer should withhold Delaware tax rather than Tennessee tax on these wages. If a Tennessee line is showing on your pay stub, raise it with payroll now rather than at filing time.
How current is this?
The Delaware and Tennessee rules on this page were last checked against Delaware Division of Revenue and Tennessee 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
- Tennessee Department of Revenue — individual income taxaccessed 2026-08-07