Local Income Tax

I live in PA, and work in DE. On my w-2, my locality code is "880000" which when I searched is an out of state code. My resident town says I still have to file through them. But when I try to file through the collector, my local wage is only 1/5 of my state wage. So now I owe money to my local town. I've already used the tax credits I have received from DE to PA state tax return. Did my employer mess up my W-2?