Reciprocity state pair

Live in Pennsylvania, work in New Jersey

Reciprocity agreement: covered employee wages are subject to state income tax only in your home state. Give your employer the work state's exemption form and arrange home-state withholding. County and city taxes require a separate check.

By Abu HasnatPage updated Nov 7, 2026Data: Pennsylvania and New Jersey revenue departments (methodology)

Official tax guidance for both states

Check withholding, filing requirements and current forms with each state's tax agency.

Pennsylvania: Department of Revenue (opens in new tab)
New Jersey: Division of Taxation (opens in new tab)

Agency directory checked 2026-10-01 against the IRS state-government directory. This verifies the agency links, not an individual tax result. Use forms for the year you are filing.

Before you use this estimate

This model assumes a full-year resident of Pennsylvania, ordinary employee wages and all workdays physically in New Jersey. Check exemption eligibility before treating a work-state amount of $0 as your own result. Withholding is a prepayment, not final tax liability. Other income, a move during the year, remote work and separate local taxes or credits can change the result.

Wage-exemption conditions: 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).

I live inI work inAnnual wages ($)Filing status

State income tax: $3,070 a year

Modeled annual state income tax for living in Pennsylvania and working in New Jersey: about $3,070 on $100,000 of wages.

Conditions for this pair: 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).

Tax guide and official sources: live in Pennsylvania, work in New Jersey

Official agency starting points: Pennsylvania tax agency (opens in new tab) · New Jersey tax agency (opens in new tab). These directory links identify the selected states' agencies, not your filing obligations. Check their individual-tax guidance and forms for the year you are filing.

Tax to New Jersey

nonresident

Tax to Pennsylvania

$3,070

resident

Total state tax

$3,070

Typical state returns

This is the usual filing pattern, not a determination that you must file. Filing thresholds, age or dependent status, other income and withholding refunds can change which returns you need.

How this $100,000 estimate adds up

These steps follow the selected home, work state, salary and filing status. They reconcile the model's annual liability, not the amounts withheld from your paycheck.

Modeled state income tax for Pennsylvania residence and New Jersey work
Step	New Jersey work state	Pennsylvania home state
Tax before the modeled other-state credit	$0	$3,070
Modeled other-state credit subtracted	$0	$0
Tax after that credit	$0	$3,070

Total: $0 + $3,070 = $3,070 a year. Amounts are rounded for display. Work-state wage exemptions, when applicable, are already reflected in the first row; they are not an other-state credit.

No other-state credit is subtracted in this selected scenario. Included county components stay in these amounts; excluded local taxes and credits stay excluded. Federal income tax, payroll programs and refund eligibility are outside this reconciliation.

State tax at different salaries

Wages	To NJ	To PA	Modeled 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.

From paycheck withholding to your returns

Withholding: Give your employer Form NJ-165 to stop New Jersey income-tax withholding on covered employee compensation. Arrange Pennsylvania withholding or estimated payments separately.
Returns: File the Pennsylvania resident return (PA-40) if required. A New Jersey nonresident return (NJ-1040NR) may be needed to recover New Jersey tax withheld in error; nonwage New Jersey income can also require a return.
Credit or refund: Covered wages are exempt from New Jersey state income tax under reciprocity. Recover erroneous New Jersey withholding through a refund claim rather than treating it as an eligible Pennsylvania credit.

Worked example: $100,000 of wages

Single filer, full-year resident of Pennsylvania, all work performed in New Jersey, no other income, standard deductions and modeled personal exemptions. Covered wages are exempt from New Jersey state income tax under wage reciprocity. Pay a modeled $3,070 to Pennsylvania, total $3,070. This exemption is not an other-state tax credit.

Annual liability, not paycheck withholding or a refund estimate. Federal tax, payroll programs, other local taxes, special credits and part-year residency are excluded. Local income taxes not included.

Remote-work and local exceptions

The wage reciprocity agreement also means New Jersey's convenience rule does not apply to Pennsylvania residents. Pennsylvania local earned-income taxes and other income are separate and excluded from the example.

Official forms and instructions

Source audit 2026-09-30. Use the return and instructions for the year you are filing; a current-forms link may still show a prior-year return. Official sources checked; not independently reviewed.

What to do

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: Pennsylvania local Earned Income Tax (Act 32) is generally withheld at the higher of the resident rate or the work-location nonresident rate. Out-of-state employees owe the Pennsylvania worksite municipality's nonresident EIT rate and applicable Local Services Tax; a 0% Pennsylvania resident rate does not exempt their worksite wages. State wage reciprocity does not remove these separate local taxes. Philadelphia uses its separate Wage Tax: from July 1, 2026, 3.735% for residents and 3.425% for nonresidents on taxable work in the city. Check your actual home/work municipality and local credit rules; local taxes are not calculated here.
New Jersey: No local wage tax on employees (Newark's 1% payroll tax is employer-paid).

Frequently asked questions

Do I pay New Jersey income tax if I live in Pennsylvania?

If you qualify for the wage-reciprocity exemption, no New Jersey state income tax on covered employee wages: under reciprocity Pennsylvania taxes them. City and county taxes require a separate check. 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?

File the Pennsylvania resident return (PA-40) if required. A New Jersey nonresident return (NJ-1040NR) may be needed to recover New Jersey tax withheld in error; nonwage New Jersey income can also require a return.

Will I be taxed twice?

Not at the state level on covered wages: under reciprocity Pennsylvania taxes them, about $3,070 on $100,000 in this model. The estimate includes resident county tax where modeled; other local taxes or credits are separate.

Rules reviewed 2026-09-24 from state revenue departments and the Tax Foundation. Estimates only; confirm with each state's revenue department.