I work in DE but live in PA. I am filing jointly with my husband. It appears we owe Delaware due to income he earned from PA. Is this correct?

[DanielV01]

It shouldn't be the case, no.  Delaware won't tax his income, because he is not living in Delaware.  However, his income can be factored in to determine Delaware tax.  Delaware would pretend that all of your income is taxable in Delaware, and then prorate the tax to the percentage of income earned in Delaware.

However, Delaware does give you the option to file as Married Filing Separately even though you are filing jointly on the Federal return.  If you wish to explore this option to see if that would result in a lower Delaware tax calculation, please see this FAQ:  https://ttlc.intuit.com/replies/3301995

[jssaab]

Well Turbo Tax does not know this it appears and has made thousands of people pay taxes they do not owe in Delaware.

Delaware allows you to file separately to your souse regardless of how you file your federal taxes. BUT IS NOT AN OPTION IN TURBO TAX

This is the easiest way not to be taxed in both states and not file any of your spouses income to be co-mingled in the Delaware working spouse. This is advantageous for many reasons. 

If you can allocate deductions for other in-state activity (say a  rental activity or other Delaware only expense (un-reimbursed employee expenses), you can reduce the income of the Delaware spouse and reduce there income enough to reduce tax liability or move into a lower bracket.

Also, any money earned OUTSIDE of Delaware (outside DE bank interest for instance should not be reported to Delaware ever.