NJ ends Reciprocal Tax Agreement with PA

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NJ ends Reciprocal Tax Agreement with PA

New Jersey has ended a nearly 40-year-old reciprocal tax agreement with Pennsylvania effective December 31, 2016. The agreement allows commuters to pay income tax to the state where they live, rather than the state where they work.

Effective January 1, 2017, Pennsylvania residents working in New Jersey will be subject to New Jersey income tax. Similarly, New Jersey residents working in Pennsylvania will be subject to the Pennsylvania income tax.

Pennsylvania Employers of New Jersey Residents (Effective Jan. 1, 2017)

Additional Information

A flier is available that employers can print and post to inform employees of this important tax change. Additional information for employees is available from the PA Department of Revenue at revenue.pa.gov. The NJ Division of Taxation is at njtaxation.org.

Posted: October 2016

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