You owe NJ income tax because you're a resident of NJ. Your resident state can tax ALL your income, regardless of where you earn it.
The NJ-PA reciprocity agreement simply means that a NJ resident who earns W-2 wages or salary in PA is taxed on that income only by their home state of NJ.
If you haven't already done so, submit PA Form REV-419 to your employer to declare exemption from PA withholding. Here's a link to the form:
https://www.revenue.pa.gov/FormsandPublications/FormsforBusinesses/EmployerWithholding/Documents/rev...
If your employer mistakenly withheld PA taxes, you'll have to submit a non-resident PA tax return, on which you declare zero PA income, in order to obtain a refund.
**Answers are correct to the best of my ability but do not constitute tax or legal advice.
