The Delaware income tax law requires that employers withhold state income tax from the wages of resident and nonresident employees. The definition of employer and employee is the same as for federal income tax purposes. An employer is any person or organization for whom an individual performs any services as an employee. It includes any person or organization paying wages to a former employee after termination of his employment. Delaware automatically incorporates changes to the federal Internal Revenue Code as they are enacted.
“Employee” defined. Everyone who performs services subject to the will and control of an employer, both as to what will be done and how it will be done, is an employee. It does not matter that the employer permits the employee considerable discretion and freedom of action, if the employer has legal right to control both the method and the result of the services.
Withholding applies to compensation paid by employers to employees, including salary, bonus, vacation allowance, and commission. Delaware generally applies the same rules as federal law to determine which payments are subject to withholding.