File a married filing separate Delaware return for just yourself. Delaware says, "Generally, separate returns will be advantageous if both spouses have Delaware adjusted gross income in excess of $9,400 or if only
one spouse worked in Delaware." See FILING STATUS 2 AND 3 – MARRIED.
You can file joint federal and separate DE.
Your wife's income is impacting your DE refund. Delaware uses your joint income to calculate a tax rate. Then your actual tax is the DE percentage of that tax. In other words, if you made $50,000 in DE and $100,000 combined, your tax rate is not based on $50,000 but 50% of the tax on $100,000, a higher rate. That's why your wife's income is cutting into your refund.
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