I am a PA resident. My 2016 income included $5100 from a New Jersey institution on a W2, and yet there was no indication I needed to file an NJ return. Is that right?

[DS30 · Accepted solution]

Yes, that is correct.

You will only need to file a PA resident state income tax return to report all income (including your NJ-source wages). You will not have to file an NJ nonresident state income tax return.

PA and NJ have what is called a state reciprocal agreement. This allows nonresidents to not have state withholding taxes taken out for wages earned in the state.

Since you will not have an NJ state income tax filing, just check that you selected "no" to " Did you make money in any other states?" under the Personal Information section in TurboTax (see screenshots)

You can get rid of a state without clearing your federal return by just deleting the state from your list of states under the "State Taxes" tab.