Yes. You must file a New Jersey Resident Return and a return for Pennsylvania. Per the Pennsylvania Department of Revenue website, they do not have a separate form for nonresidents. Rather, it must be indicated on the tax form itself that you are a nonresident. In addition, Philadelphia does not have a separate income state tax return; it is combined with the Pennsylvania state return.
As it states in the link you provided, "the New Jersey/Pennsylvania Reciprocal Agreement does not apply to income or wage tax imposed and collected by the City of Philadelphia or any other municipality in Pennsylvania. That means a New Jersey resident who works in Philadelphia and pays city wage taxes can claim a credit for the taxes paid to Philadelphia".
This means that you must file a New Jersey resident return and a Pennsylvania return marked non-resident. You will pay the Philadelphia tax to Pennsylvania and get a credit for it on your New Jersey return.
The first thing you want to do is make sure you've filled out the Personal Info section correctly:
- With your return open, select My Info in the left-hand menu.
- Then, on the Personal info summary screen, scroll down to Other State Income, and select Edit.
- At the Did you make money in any other states? question, answer Yes and make sure your nonresident state(s) are selected from the drop-down.
- Select Continue to return to your Personal info summary.
After you finish your federal return, you'll automatically move to the State tab, where you'll see your nonresident state(s) listed in addition to your resident state.
To ensure accurate calculations, always complete the non-resident (PA) return first if filing in multiple states because your resident state (NJ) will give you a credit for taxes paid.
@FalconX
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