If you live in PA and work in NJ, you should be paying PA taxes, not NJ Taxes. PA & NJ have a reciprocal agreement, so you will only be taxed by one state and that will be the state where you reside.
If NJ taxes have been withheld you will need to file both a PA and NJ tax return. You will claim the refund from NJ and then pay PA whatever amount is due. You will need to include a statement with your NJ Non Resident return saying you are a PA resident.
In the meantime, it would be a good idea if you haven't already to fill out an NJ165 and give it to your employer so they can stop withholding NJ income tax.
Here is a link with more information. http://www.state.nj.us/treasury/taxation/njit25.shtml
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