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I live in PA and work in NJ. I paid PA state income taxes. Why do I have to file a NJ Return?

In addition, I collected Unemployment from NJ and had my federal withheld. 

2 Replies
Cindy0H
New Member

I live in PA and work in NJ. I paid PA state income taxes. Why do I have to file a NJ Return?

No, you do not need to file in New Jersey. As written below, it is because of the Reciprocal  Income Tax Agreement and because New Jersey does not tax unemployment.

Pennsylvania Residents

Income From New Jersey. As a result of Reciprocal Personal Income Tax the  Agreement between Pennsylvania and New Jersey, compensation paid to Pennsylvania residents employed in New Jersey is not subject to New Jersey Income Tax. Compensation means salaries, wages, tips, fees, commissions, bonuses, and other remuneration received for services rendered as an employee.

If New Jersey Income Tax was withheld from your wages, you must file a NewJersey nonresident return to get a refund. To stop the withholding of New Jersey Income Tax, complete a New Jersey Employee's Certificate of Nonresidence in New Jersey (Form NJ-165) and give it to your employer.

The Reciprocal Agreement covers compensation only. If you are self-employed or receive other income (for example, gain from the sale of property) that is taxable in both states, you must file a New Jersey nonresident return and report the income received.

However, unemployment compensation received from the State of New Jersey is not taxable.

If you have other questions about this, ask in the comment section below.

I live in PA and work in NJ. I paid PA state income taxes. Why do I have to file a NJ Return?

Well, the payroll company paid half a year's taxes to New Jersey because paychecks say they didn't know that was a thing.  Now I owe PA 600+ dollars in taxes. And NJ has that money. I will have to file in NJ as well to get that refund and pay it to PA. If I use Turbotax I have to pay an additional $44 to file electronically. How can I fix this, or will I have to fill out the form manually and submit to receive the refund. 

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