PA and NJ tax issues

[jrizzo0425]

I live in PA and worked half of 2021 in PA, and half of it in NJ. Do I need to file a NJ return if my NJ employer withheld PA taxes? Is NJ allowed to try to tax my PA income? I started a state return for both states and PA says I broke even and NJ says I owe $230, which doesn’t seem right. 

Also, my NJ employer did not withhold PA local income tax. I am required to pay PA local tax to the municipality where I live and my employer, who obviously doesn’t know about PA local tax, says that I don’t have to pay PA local tax. My PA local tax return says I owe $153 due to them not withholding any local. How do I remedy this? I spoke to HR and they just keep insisting they are correct in not withholding. 

Please help as this is so confusing. 

[DMarkM1]

You do not need to file a NJ tax return.  PA and NJ have a reciprocity agreement.  You only pay taxes in PA.  In the "My Info" section you will not indicate that you earned money in another state.  

You and your employer are both correct on withholding/paying local taxes to PA municipalities.  The out-of-state employer is not required to withhold local PA taxes.  However, the employee is still required to pay those taxes. 

f you can convince the employer out of courtesy to withhold that would be great.  Otherwise you can pay quarterly or make the end of year payment with your tax return.  Here is a link for reference..

[jrizzo0425]

Thank you for your answer. 

I don’t have to file a NJ return at all? Not even with the NJ-1040NR form? (If this is the case I wish I could get a refund from TurboTax as I already spent the $40 on the additional state.)

I have confirmed that my employer is withholding PA tax and not NJ tax, if that matters. 

[RobertB4444]

You really don't have to file a NJ return.  You're all set.

This is more info on the reciprocity agreement between PA and NJ.