NJ Income Tax - PA/NJ Reciprocal Income Tax Agreement
Pennsylvania residents who receive compensation from New Jersey sources are not subject to New Jersey income tax on those earnings. Under the State of New Jersey and the Commonwealth of Pennsylvania Reciprocal Personal Income Tax Agreement, a New Jersey employer is not required to withhold New Jersey income tax from compensation paid to its Pennsylvania resident employees who file form NJ-165, Employee's Certificate of Non-Residence in New Jersey, with their employer. The reverse holds true for Pennsylvania employers with New Jersey resident employees.
This agreement covers compensation only. Compensation means salaries, wages, tips, fees, commissions, bonuses, and other remuneration received for services rendered as an employee. Pennsylvania residents who are self-employed or who receive other types of income from sources within New Jersey must file a New Jersey nonresident return and report the income received. An example of other income is gain from the sale of property located in New Jersey, which is taxable in both states.
If you are a Pennsylvania resident and New Jersey income tax was withheld from your wages, you must file a New Jersey nonresident return to obtain a refund. To stop the withholding of New Jersey income tax, complete an Employee's Certificate of Non-Residence in New Jersey (Form NJ-165) and give it to your employer. Pennsylvania has a similar form for New Jersey residents working there. Contact the Pennsylvania Department of Revenue for more information. When filing for a refund, Pennsylvania residents must enclose a signed statement with their New Jersey nonresident income tax returns declaring that they are residents of the Commonwealth of Pennsylvania.
Order an Employee's Certificate of Non-Residence in New Jersey, Form NJ-165; New Jersey Nonresident Return, and instruction booklet, or go to our online tax forms.
This agreement covers compensation only. Compensation means salaries, wages, tips, fees, commissions, bonuses, and other remuneration received for services rendered as an employee. Pennsylvania residents who are self-employed or who receive other types of income from sources within New Jersey must file a New Jersey nonresident return and report the income received. An example of other income is gain from the sale of property located in New Jersey, which is taxable in both states.
If you are a Pennsylvania resident and New Jersey income tax was withheld from your wages, you must file a New Jersey nonresident return to obtain a refund. To stop the withholding of New Jersey income tax, complete an Employee's Certificate of Non-Residence in New Jersey (Form NJ-165) and give it to your employer. Pennsylvania has a similar form for New Jersey residents working there. Contact the Pennsylvania Department of Revenue for more information. When filing for a refund, Pennsylvania residents must enclose a signed statement with their New Jersey nonresident income tax returns declaring that they are residents of the Commonwealth of Pennsylvania.
Order an Employee's Certificate of Non-Residence in New Jersey, Form NJ-165; New Jersey Nonresident Return, and instruction booklet, or go to our online tax forms.
