Alex Can I live in NJ and work in PA?
If you lived in NJ the entire tax year, and worked in PA, your W-2 wages are not subject to PA taxes. For tax purposes, your PA wages are considered NJ income, and are fully taxable by NJ.
Can you work in NJ and live in PA?
Live in PA and work in NJ. You’re correct, NJ and PA do have tax reciprocity for W-2 wages. If your only income from NJ was W-2 wages, you do not have to file a NJ tax return. That income is taxable only by your home state of PA.
Do you pay NJ income tax if you live in PA?
According to the NJ tax page it says “Income From Philadelphia or Other Pennsylvania Municipalities. The Reciprocal Agreement does not apply to the wage or income tax imposed and collected by the City of Philadelphia or any other municipality in Pennsylvania.
Do you have to file NJ tax return if you work in PA?
>>However, if your NJ employer mistakenly withheld NJ state tax, you’d have to file a non-resident NJ return, showing zero NJ income, in order to receive a refund of those taxes. PA residents who work in NJ should file Form NJ-165 with their employer. Here’s a link to that form: https://www.state.nj.us/treasury/taxation/pdf/current/nj165.pdf
Can you work in one state and live in another?
Through these agreements, you can live in one state and work in a neighboring state without paying taxes there. Instead of paying taxes where you work, you will pay taxes in your resident state, which is the state where you live. Pennsylvania and New Jersey, for example, have such an agreement.
What happens if you work in New Jersey and live in Pennsylvania?
If you live in Pennsylvania but work in New Jersey, you pay your tax to Pennsylvania where you live. New Jersey will not withhold any state money from your paycheck. They will of course continue to withhold federal taxes as required.
Do you have to pay taxes in New Jersey if you live in Pennsylvania?
Pennsylvanians who had their Pennsylvania incomes taxes withheld by New Jersey employers but are also considered residents for New Jersey income tax purposes are ineligible for income tax credits, since they would owe income to both states. These taxpayers are subject to income taxes as Pennsylvania residents and nonresidents in New Jersey.
Is there a reciprocal agreement between Pennsylvania and New Jersey?
New Jersey and Pennsylvania have a reciprocal agreement with each other, which means that both states mutually agree that employers within the state should not withhold the tax associated with the employee’s work state.
Through these agreements, you can live in one state and work in a neighboring state without paying taxes there. Instead of paying taxes where you work, you will pay taxes in your resident state, which is the state where you live. Pennsylvania and New Jersey, for example, have such an agreement.