Husband lives in Illinois, Wife lives in Delaware.

[judytaylor2]

Husband lives in Illinois.  Wife lives in Delaware but works for Illinois company.  When filing Delaware state, why is husbands income being included.

[AmyC]

If you are filing a joint return as a resident, all income will be taxed. You can file MFS for DE to claim just your resident income with a credit for the tax paid to IL on the same income.

You get credit for the lower state tax on the lowest taxable amount.

• Each state calculates taxable income differently. 
• Each state has its own tax rate/ system.
• You get the lowest of both categories as a tax credit.

See  How do I prepare a joint federal return and separate state