Live in NJ but work in PA. Do I need to fill a tax return for PA?

[TomD8 · Accepted solution]

PA and NJ have tax reciprocity with regard to W-2 wages.  If you lived in NJ the entire tax year, and worked in PA, your W-2 wages are not subject to PA taxes.  For tax purposes, your PA wages are considered NJ income, and are fully taxable by NJ.  If this is your situation, you would answer No in the Personal Info section of TT to the question about having Other State Income. 

The only reason you'd have to file a non-resident PA return is if your employer mistakenly withheld PA taxes, or if you had PA income other than W-2 wages, such as rental income from a property located in PA.  PA-NJ reciprocity applies only to W-2 wages, not to any other type of income.

[madhud]

What about the local income taxes withheld by locality in PA, do we need to file a non-resident PA return?

[TomD8]

No, because the local taxes withheld by PA are not refundable.  But you can take a credit for them on your NJ return.

[Cmonkey33]

I have a similar problem.  Live in NJ all of 2019 work in PA but did not see where I could take a credit for city wage tax. Hence I need to amend and refile my taxes.  How do I do this

[JotikaT2]

I have attached a link with instructions for amending your state returns.  

Steps to amend a state return

[Djphrw]

I have a question: I live in PA and work in NJ.(remotely) what if your employer was only taking NJ income tax out for the first few pay checks and then it was corrected to just take out PA income tax. How would you file your taxes? 

Also, in the total wages made for NJ and PA add up to be more than I actually made. 

[AmyC]

NJ taxes all income made plus deferrals to retirement, you would need to check with HR to see what all NJ does differently on your paycheck.

PA resident so PA taxes all income.

You will need to file NJ nonresident return.  You will pay NJ tax on the income and claim a credit on your PA return. Please carefully follow these directions.

You will need to prepare the states in a special order. You may need to delete both states and begin again.

1. First, prepare your non-resident NJ  return. This creates your tax liability for the non-resident state. How do I file a nonresident state return?
2. THEN prepare your resident state PA return and it will generate a credit for your income already being taxed in the non-resident state.
3. The credit will be the lower of the state tax liabilities on the same income. You may owe your resident state.

It isn't possible for the program to create a credit before it knows the liability. Your returns may be wrong if you do not prepare the states in this order.

[mvazq75]

I just completed my first turbo tax and had to complete non resident state tax for NJ because I live in PA but work in NJ. I feel I have ro pay alot based on my answers and may have answered wrong. Think the above answer applies but in reverse. Did I check off something wrong?