Live in Delaware, Work in Minnesota: Which State Taxes Your Paycheck?
Answer
You file twice: Minnesota first, then Delaware. There is no reciprocity agreement between these two states, so Minnesota taxes the income where it was earned and Delaware taxes it again as resident income — with the resident credit removing the double charge rather than an exemption form preventing it.
Last verified
Two states can lawfully tax the same wages: Minnesota 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 · MinnesotaForm M1 with Schedule M1NR
File the Minnesota nonresident return FIRST — you need the Minnesota 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 Minnesota. The credit is capped at what Delaware would have charged on that same income, so if Minnesota taxes it at a higher rate the difference is not refunded.
The two states, side by side
| Delaware | Minnesota | |
|---|---|---|
| Taxes wages | Yes — graduated | Yes — graduated |
| Reciprocity partners | None | 2 (Form MWR) |
| Convenience rule | Yes — general rule | No |
| Nonresident return | Form PIT-NON | Form M1 with Schedule M1NR |
| Credit for other-state tax | Schedule I (Form PIT-RES) | Schedule M1CR |
| Nonresident safe harbour | None published | None published |
| Local income tax | Yes | No |
| Revenue department | Delaware Division of Revenue | Minnesota Department of Revenue |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Minnesota 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 → MinnesotaHome state only
- 1099 contractor: Delaware → MinnesotaHome state, plus the client state if you work there
- Moved mid-year: Delaware → MinnesotaTwo part-year returns
Other Delaware pairs
Questions people actually ask
I live in Delaware and work in Minnesota. Which state takes the tax out of my paycheck?
You file twice: Minnesota first, then Delaware. There is no reciprocity agreement between these two states, so Minnesota taxes the income where it was earned and Delaware taxes it again as resident income — with the resident credit removing the double charge rather than an exemption form preventing it.
Which state should my employer be withholding for?
Minnesota. The wages are sourced to Minnesota, so Minnesota 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 Minnesota on the same income, claimed on Schedule I (Form PIT-RES). The credit is capped at the Delaware tax on that income, so if Minnesota taxes it more heavily the excess is not refunded by either state.
How current is this?
The Delaware and Minnesota rules on this page were last checked against Delaware Division of Revenue and Minnesota 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
- Minnesota Department of Revenue — individual income taxaccessed 2026-08-07