KeshaH
Expert Alumni

Get your taxes done using TurboTax

Since you live in Indiana and physically work from your home in Indiana, you are considered an Indiana resident for tax purposes - regardless of what address is listed on your W-2. You will need to file an Indiana resident tax return and report all of your income. As a resident, Indiana taxes all of your income regardless of where it was earned.

 

Whether your income is also taxable in Delaware depends on whether you are able to work in Delaware. Delaware has a "convenience of the employer" rule which states that income earned by nonresidents working remotely for Delaware employers is taxable in Delaware unless the remote work is required by the employer and not just for the employee's convenience.

 

If your employer does not have a location for you work from in Delaware, your income would not be taxable to Delaware. You'd need to file a nonresident return and indicate that none of your income is taxable in Delaware so that you can get back any tax withholding.

 

If your employer does have a location for you to work from in Delaware, but you have chosen to work remotely, your income would be taxable to Delaware. You'd file a nonresident return and pay the tax due on your Delaware income only. Indiana would provide a tax credit against your Indiana tax to avoid double taxation on the income that's taxable in both states.

 

In either case, I suggest making estimated payments to Indiana throughout the year to avoid having a big bill at tax time going forward.