2026 · New Jersey → Pennsylvania
Living in New Jersey, working for a Pennsylvania employer
New Jersey and Pennsylvania have a wage reciprocity agreement: you pay tax only to New Jersey. File NJ-165 with your employer to stop Pennsylvania withholding.
Check your own situation
New Jersey and Pennsylvania have a reciprocity agreement, so a New Jersey resident working for a Pennsylvania employer pays tax only to New Jersey. File Form NJ-165 with your employer to stop Pennsylvania withholding, and you file a single resident return. Reciprocity is the friendliest cross-border arrangement, no credit dance, no double filing.
You live in New Jersey, which has a graduated income tax up to 10.8%. And your employer is in Pennsylvania, which has a flat 3.1% income tax. That combination decides who taxes your wages, and whether a credit keeps you from paying twice. Here's the rule for this specific pair.
The rule for New Jersey → Pennsylvania
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Reciprocity agreement
New Jersey and Pennsylvania have a wage reciprocity agreement: you pay tax only to New Jersey. File NJ-165 with your employer to stop Pennsylvania withholding.
What each state would take on $100,000
| Pennsylvania tax (work state) | $3,070 |
| New Jersey tax (home state) | $4,246 |
| Double-taxation risk | Low, one state, or a credit applies |
A credit in New Jersey for tax paid to Pennsylvania is what prevents the same wages being fully taxed twice, confirm the mechanics on both returns.
Questions
Do I pay New Jersey or Pennsylvania tax if I work remotely?
New Jersey and Pennsylvania have a wage reciprocity agreement: you pay tax only to New Jersey. File NJ-165 with your employer to stop Pennsylvania withholding.
Will I be taxed twice living in New Jersey and working for a Pennsylvania employer?
Usually not. Reciprocity agreement, the mechanism here prevents paying full tax to both states, though you may still file two returns.
Related
This maps the rules; it does not file them. Cross-border filing needs a professional. Convenience-rule specifics vary, confirm with the state Department of Revenue. Nothing stored. Not tax or legal advice.