I live in Maryland but this year my paycheck comes from Delaware.

[kenlee1]

I live in Maryland but this year my paycheck comes from Delaware. Do I need 2 separate State returns? How will that be included in my subscription?

[xmasbaby0]

"my paycheck comes from Delaware.."

You live in Maryland.   Where do you actually work?   Do you work in Maryland or in Delaware?

[kenlee1]

I work in Maryland

[kenlee1]

I work from Maryland

[xmasbaby0]

So you mean your paycheck is just sent to you from DE?   You file a MD tax return, not a DE return.    Lots of people work for employers whose corporate office and/or payroll office is located in another state.   You do not have to pay tax to a state you neither live nor work in.

[TomD8]

Caution: you may owe Delaware taxes if you're a remote worker for a company located in Delaware.

Delaware is one of a handful of states that tax non-resident telecommuters according to the "convenience of the employer" doctrine.  That means that if you're working remotely from MD for your own convenience, rather than for the convenience of your employer, your income is taxable by Delaware - as well as by your home state of MD.

There is an exception that went into effect in June of 2020: if you're working remotely from MD due to Covid restrictions, Delaware will not tax the income.  You can read the details and requirements here:

https://revenuefiles.delaware.gov/2021/TIM%202021-2%20-%20treatment%20of%20remote%20work%20in%202020...

[edeyrup]

Actually worked in maryland in my home because of covid

[RaifH]

As @TomD8 said above, Delaware has interesting rules regarding out-of-state telecommuters during the pandemic. If your employer required or "strongly encouraged" you to work from home in 2021, then the income is not attributable to Delaware.

At any point in 2021, your office may have reopened and your employer allowed you to work in Delaware. Even if you chose not to and continued to work remotely in Maryland, your income is taxable by Delaware from the date you had the ability to work in your office. 

If you have income taxable by both Delaware and Maryland, do your nonresident Delaware return first. Maryland will then provide a credit for the taxes paid to Delaware.

@edeyrup