PA and NJ have a reciprocal agreement that applies only to wages. So if your only NJ sourced income is wages (W2), you do not need to file a NJ tax return unless NJ taxes were withheld and you wish a refund. If you answer the question regarding income from another state, TurboTax will guide you to prepare two state income tax returns. If you do not need to file a NJ return, answer the question regarding income from another state with a "NO" (per the instruction on that page).
If NJ income taxes withheld and you wish a refund, COMPLETE federal return first, then the non-resident NJ return, finally the PA resident return.
All income is taxable by PA on a PA resident return.
More info, see: http://www.state.nj.us/treasury/taxation/njit25.shtml
Don't forget to hand prepare and file your PA local earned income tax return, your wages from NJ is taxable by your local municipality.
