Live in Delaware, Work in Virginia: Which State Taxes Your Paycheck?
Answer
Virginia withholds and Delaware credits. Without an agreement between them, both states are entitled to tax income earned in Virginia by a Delaware resident. The mechanism that stops you paying twice is the credit on the Delaware resident return, which is why the Virginia return has to be completed first.
Last verified
Without an agreement between Delaware and Virginia, the overlap is handled after the fact rather than prevented. That is why the filing order matters: the Virginia figure is an input to the Delaware return, so completing Delaware first means doing it twice.
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 · VirginiaForm 763
File the Virginia nonresident return FIRST — you need the Virginia 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 Virginia. The credit is capped at what Delaware would have charged on that same income, so if Virginia taxes it at a higher rate the difference is not refunded.
The two states, side by side
| Delaware | Virginia | |
|---|---|---|
| Taxes wages | Yes — graduated | Yes — graduated |
| Reciprocity partners | None | 5 (Form VA-4) |
| Convenience rule | Yes — general rule | No |
| Nonresident return | Form PIT-NON | Form 763 |
| Credit for other-state tax | Schedule I (Form PIT-RES) | Schedule OSC |
| Nonresident safe harbour | None published | None published |
| Local income tax | Yes | No |
| Revenue department | Delaware Division of Revenue | Virginia Department of Taxation |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Virginia 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 → VirginiaHome state only
- 1099 contractor: Delaware → VirginiaHome state, plus the client state if you work there
- Moved mid-year: Delaware → VirginiaTwo part-year returns
Other Delaware pairs
Questions people actually ask
I live in Delaware and work in Virginia. Which state takes the tax out of my paycheck?
Virginia withholds and Delaware credits. Without an agreement between them, both states are entitled to tax income earned in Virginia by a Delaware resident. The mechanism that stops you paying twice is the credit on the Delaware resident return, which is why the Virginia return has to be completed first.
Which state should my employer be withholding for?
Virginia. The wages are sourced to Virginia, so Virginia 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 Virginia on the same income, claimed on Schedule I (Form PIT-RES). The credit is capped at the Delaware tax on that income, so if Virginia taxes it more heavily the excess is not refunded by either state.
How current is this?
The Delaware and Virginia rules on this page were last checked against Delaware Division of Revenue and Virginia Department of Taxation 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
- Virginia Department of Taxation — individual income taxaccessed 2026-08-07
- Virginia — Form VA-4accessed 2026-08-07
- Virginia Tax — Reciprocityaccessed 2026-08-07