If your employer withheld the PA taxes, you must file a nonresident return for the state taxes. At this point, if you report the income on the PA NR return, you will get the credit on the NJ return, or you can file with zero PA income get the PA taxes refunded, but then pay on all the income in NJ. If you have not already done so, you must file a Form REV-419EX to stop the PA withholding.
Regardless, you do get the credit for the Philadelphia City tax on your NJ return.
See NJ Income Tax – PA/NJ Reciprocal Income Tax Agreement.
@amyT1
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