Live in Delaware, Work in Arkansas: Which State Taxes Your Paycheck?
Answer
Both states tax the same wages, and a credit undoes the overlap. Arkansas withholds as your work state and you file a Arkansas nonresident return; Delaware taxes residents on all income, so you also file at home and claim the credit for tax paid to Arkansas. File Arkansas first.
Last verified
Two states can lawfully tax the same wages: Arkansas because the work happened there, Delaware because you live there. Nothing prevents the overlap in advance — it is unwound afterwards, on the Delaware return, through the credit for taxes paid to another state.
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.
What you file
- 1Nonresident return · ArkansasForm AR1000NR
File the Arkansas nonresident return FIRST — you need the Arkansas 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 Arkansas. The credit is capped at what Delaware would have charged on that same income, so if Arkansas taxes it at a higher rate the difference is not refunded.
The two states, side by side
| Delaware | Arkansas | |
|---|---|---|
| Taxes wages | Yes — graduated | Yes — graduated |
| Reciprocity partners | None | None |
| Convenience rule | Yes — general rule | No |
| Nonresident return | Form PIT-NON | Form AR1000NR |
| Credit for other-state tax | Schedule I (Form PIT-RES) | Form AR1000TC |
| Nonresident safe harbour | None published | None published |
| Local income tax | Yes | No |
| Revenue department | Delaware Division of Revenue | Arkansas Department of Finance and Administration |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Arkansas and working in Delaware gives:Both states — credit offsets the double tax.
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.
- Remote worker: Delaware → ArkansasHome state only
- 1099 contractor: Delaware → ArkansasHome state, plus the client state if you work there
- Moved mid-year: Delaware → ArkansasTwo part-year returns
Other Delaware pairs
Questions people actually ask
I live in Delaware and work in Arkansas. Which state takes the tax out of my paycheck?
Both states tax the same wages, and a credit undoes the overlap. Arkansas withholds as your work state and you file a Arkansas nonresident return; Delaware taxes residents on all income, so you also file at home and claim the credit for tax paid to Arkansas. File Arkansas first.
Which state should my employer be withholding for?
Arkansas. The wages are sourced to Arkansas, so Arkansas withholding is correct and there is no Delaware withholding to set up.
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 Arkansas on the same income, claimed on Schedule I (Form PIT-RES). The credit is capped at the Delaware tax on that income, so if Arkansas taxes it more heavily the excess is not refunded by either state.
How current is this?
The Delaware and Arkansas rules on this page were last checked against Delaware Division of Revenue and Arkansas Department of Finance and Administration 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
- Arkansas Department of Finance and Administration — individual income taxaccessed 2026-08-07