Live in Tennessee, Work in Delaware: Which State Taxes Your Paycheck?
Answer
Only Delaware taxes you. Delaware withholds from wages earned inside the state and you file a Delaware nonresident return. Tennessee levies no personal income tax on wages, so there is no resident return on the other side — and no credit, because there is no Tennessee tax to offset.
Last verified
Living in a state with no income tax removes the resident return, but it does not shelter income you earn somewhere else. Delaware taxes what is earned inside Delaware, whoever earns it, and a nonresident return is how that gets settled.
Delaware also has a layer below the state one, and it is the layer that survives every agreement: Wilmington levies a city earned income tax on wages earned inside the city, collected by the city rather than the Division of Revenue.
What you file
- 1Nonresident return · DelawareForm PIT-NON
File a Delaware nonresident return for the wages you earned in Delaware. Tennessee has no wage income tax, so there is no second return and no credit to claim.
The two states, side by side
| Tennessee | Delaware | |
|---|---|---|
| Taxes wages | No | Yes — graduated |
| Reciprocity partners | None | None |
| Convenience rule | No | Yes — general rule |
| Nonresident return | Not applicable | Form PIT-NON |
| Credit for other-state tax | No income tax | Schedule I (Form PIT-RES) |
| Nonresident safe harbour | Not applicable | None published |
| Local income tax | No | Yes |
| Revenue department | Tennessee Department of Revenue | Delaware Division of Revenue |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Delaware and working in Tennessee gives:Home state only.
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: Tennessee → DelawareConvenience-of-the-employer rule — employer state taxes you
- 1099 contractor: Tennessee → DelawareClient state only, if you work there
- Moved mid-year: Tennessee → DelawareOne part-year return — the state you moved to
Other Tennessee pairs
Questions people actually ask
I live in Tennessee and work in Delaware. Which state takes the tax out of my paycheck?
Only Delaware taxes you. Delaware withholds from wages earned inside the state and you file a Delaware nonresident return. Tennessee levies no personal income tax on wages, so there is no resident return on the other side — and no credit, because there is no Tennessee tax to offset.
Which state should my employer be withholding for?
Delaware. The wages are sourced to Delaware, so Delaware withholding is correct and there is no Tennessee withholding to set up, because Tennessee levies no income tax on wages.
How current is this?
The Tennessee and Delaware rules on this page were last checked against Tennessee Department of Revenue and Delaware Division 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.
- Tennessee Department of Revenue — individual income taxaccessed 2026-08-07
- Delaware Division of Revenue — individual income taxaccessed 2026-08-07