Live in Pennsylvania, work in New Jersey
Reciprocity agreement: you pay income tax only to your home state. Give your employer the work state's exemption form so it withholds for your home state instead.
State income tax: $3,070 a year
Living in Pennsylvania and working in New Jersey, you'd pay about $3,070 in state income tax on $100,000 of wages.
Reciprocity agreement: you pay income tax only to your home state. Give your employer the work state's exemption form so it withholds for your home state instead.
State tax at different salaries
| Wages | To NJ | To PA | Total | If you worked in PA |
|---|---|---|---|---|
| $50,000 | $0 | $1,535 | $1,535 | $1,535 |
| $75,000 | $0 | $2,303 | $2,303 | $2,303 |
| $100,000 | $0 | $3,070 | $3,070 | $3,070 |
| $150,000 | $0 | $4,605 | $4,605 | $4,605 |
| $250,000 | $0 | $7,675 | $7,675 | $7,675 |
Single filer, all wages earned in New Jersey, 2026 state tax rules, standard deductions. Local income taxes not included.
What to do
- Reciprocity: PA residents working in NJ exempt from NJ gross income tax on wages; file Form NJ-165 (Employee's Certificate of Nonresidence in New Jersey).
- Keep a record of the days you work in each state, especially if you sometimes work from home.
Working from home for a New Jersey employer
New Jersey has a "convenience of the employer" rule. Retaliatory rule enacted 2023, retroactive to Jan 1, 2023: applies to residents of convenience-rule states (NJ currently lists DE, NE, NY) working remotely for NJ employers. PA residents excluded due to reciprocity; CT residents handled separately.
Local income taxes
- Pennsylvania: Local Earned Income Tax (Act 32) in nearly every municipality/school district: withheld at the higher of the resident rate or the work-location nonresident rate (typically ~1-2%+). Philadelphia Wage Tax from July 1, 2026: 3.735% resident / 3.425% nonresident (on work performed in the city); Pittsburgh 3% resident EIT (school+city) plus $52/yr Local Services Tax at work location. Out-of-state residents are not subject to PA local EIT except Philadelphia (nonresident rate) and LST where applicable. NJ residents can credit Philadelphia wage tax against NJ tax.
- New Jersey: No local wage tax on employees (Newark's 1% payroll tax is employer-paid).
Special credit rules
- NJ: New Jersey residents can also credit income or wage taxes paid to cities and other local governments in other states (for example, the Philadelphia Wage Tax) against New Jersey tax, not only other states' taxes.
Frequently asked questions
Do I pay New Jersey income tax if I live in Pennsylvania?
No. Under the reciprocity agreement you pay only Pennsylvania. PA residents working in NJ exempt from NJ gross income tax on wages; file Form NJ-165 (Employee's Certificate of Nonresidence in New Jersey).
Do I have to file taxes in both Pennsylvania and New Jersey?
Usually you file only one state return (a resident return in Pennsylvania), though some states still require a nonresident return to get a refund of any wrongly withheld tax.
Will I be taxed twice?
No. Under the reciprocity agreement only Pennsylvania taxes your wages: about $3,070 on $100,000.
Related
- Live in New Jersey, work in Pennsylvania
- Moving from Pennsylvania to New Jersey
- Moving from New Jersey to Pennsylvania
- Live in Pennsylvania, work in Delaware
- Live in Pennsylvania, work in Maryland
- Live in Pennsylvania, work in New York
- Live in Pennsylvania, work in Ohio
- Live in Pennsylvania, work in West Virginia
Rules reviewed 2026-09-24 from state revenue departments and the Tax Foundation. Estimates only; confirm with each state's revenue department.