New Jersey / Pennsylvania tax reciprocity
Each pair below is taxed by the RESIDENCE state, not the work state — the work state agrees not to withhold. Figures are illustrative, on a $75,000 salary.
Who taxes you, and what to file
The certificate goes to your employer in the state you work in. Figures are state income tax on $75,000, single, no dependents.
| Work in | Live in | Certificate to file | Tax under reciprocity | If the work state taxed you |
|---|---|---|---|---|
| New Jersey | Pennsylvania | NJ-165 | $2,303 | $2,596 |
| Pennsylvania | New Jersey | REV-419 | $2,596 | $2,303 |
The last column is hypothetical — what the work state would take with no agreement in place. It is not a second bill.
Does this cancel the local city or county tax?
Reciprocity is a state income tax concept. A local wage tax is a separate levy and can survive it.
- Working in Pennsylvania
- Pennsylvania LOCAL earned income tax (Act 32) is NOT waived. PA Revenue disclaims jurisdiction over Act 32 and directs inquiries to DCED, whose Act 32 Policy & Procedure Manual states that non-residents of Pennsylvania "should have the earned income tax withheld from their compensation at the nonresident tax rate that has been determined for that location where the employee works" — generally up to 1%.
Sources
- New Jersey: NJ Division of Taxation — the NJ/PA Reciprocal Agreement — https://www.nj.gov/treasury/taxation/njit25.shtml
- Pennsylvania: PA Dept. of Revenue — REV-415, General Information for Withholding Pennsylvania Personal Income Tax — https://www.pa.gov/content/dam/copapwp-pagov/en/revenue/documents/formsandpublications/formsforbusinesses/employerwithholding/documents/rev-415.pdf
Run your own New Jersey / Pennsylvania numbers
Opens on work in New Jersey, live in Pennsylvania. Change the salary, either state, or filing status below.
Commuting into Philadelphia specifically?
Reciprocity zeroes Pennsylvania STATE tax, but Philadelphia's city wage tax is separate and NOT covered by this agreement -- a New Jersey resident working in Philadelphia still owes the city's non-resident wage tax (3.425% for 2026). See the Philadelphia local tax calculator →
New Jersey / Pennsylvania: common questions
Does New Jersey tax Pennsylvania residents who work in NJ?
No -- New Jersey and Pennsylvania have a reciprocal personal income tax agreement, still in effect for 2026. A PA resident working in NJ owes New Jersey nothing on that W-2 compensation and is taxed on it by Pennsylvania instead. File Form NJ-165 with your NJ employer to stop NJ withholding.
What form do I file to stop PA withholding as a NJ resident?
Form REV-419, "Employee's Nonwithholding Application Certificate," filed with your Pennsylvania employer -- its Section II.b has a specific New Jersey checkbox for this exact situation.
Does this agreement cover Philadelphia's city wage tax?
No -- and this is the single most important caveat for anyone searching this pair. Philadelphia's wage tax is a city tax, not a state one, and the City of Philadelphia is not a party to the NJ/PA state agreement. A New Jersey resident commuting into Philadelphia still owes Philadelphia's non-resident wage tax (3.425% for 2026) even though PA state tax is fully waived by reciprocity.
Does the agreement cover self-employment or 1099 income?
No -- it covers only compensation: salaries, wages, tips, fees, commissions, bonuses, and other payments for services as an employee. Self-employment income and other income types are not covered and may require a nonresident return in the work state.
Other pairs involving these states
See all 32 state reciprocity pairs →