Compensation paid to Pennsylvania residents employed in New Jersey is not subject to New Jersey Income Tax under the terms of the Reciprocal Personal Income Tax Agreement between the states. Similarly, New Jersey residents are not subject to Pennsylvania income tax either.

Does NJ and PA have a reciprocal agreement?

New Jersey and Pennsylvania have a reciprocal agreement. Compensation paid to New Jersey residents employed in Pennsylvania is not subject to Pennsylvania income tax. Compensation means salaries, wages, tips, fees, commissions, bonuses, and other remuneration received for services rendered as an employee.

Do you pay state tax in NJ but work in Philadelphia?

NJ and PA have reciprocity, so residents only pay state tax to their home state. Cities aren’t covered by reciprocity, which is why Philadelphia was withheld. To input the credit for taxes paid to Philadelphia, you need to access the Credit For Taxes Paid section of the New Jersey interview under State Taxes.

Do you get tax refund for working in Philadelphia?

Philadelphia will not refund the taxes you paid while working in Philadelphia. However, you can claim a credit on your NJ resident tax return for these taxes paid to an out of state jurisdiction. See page 42 of this document:

When to take NJ state taxes out of your paycheck?

If you live in NJ and work in PA, your PA based employer should be taking NJ state income taxes out of your paycheck and remitting them to NJ. June 3, 2019 1:38 PM

Is there a reciprocal tax agreement between NJ and PA?

NJ Income Tax – PA/NJ Reciprocal Income Tax Agreement. The Reciprocal Agreement covers compensation only. If you are self-employed or receive other income (for example, gain from sale of property) that is taxable in both states, you must file a New Jersey nonresident return and report the income received.