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New Member
posted Mar 5, 2023 9:12:43 AM

property tax deductions if I work and own a house in NJ but live in PA

This is a hypothetical question to help me understand cross state tax implications.

 

If I own a house in NJ (no mortgage) and work in NJ (income through salary) but live in PA in another house (pay interest and property tax). I understand that the reciprocal agreement between NJ and PA would exempt me from paying state tax in NJ, as I would pay the state tax in PA. But what happens to the property tax that I pay on my NJ house? would the property tax that I pay on my NJ house be considered as a tax deductible? 

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1 Replies
Expert Alumni
Mar 5, 2023 10:33:33 AM

Any property taxes paid may be a deduction on your federal tax return if you itemize deductions.  In general, they do not affect your state tax return, and in the case of reciprocity there is no affect because the reciprocity only applies to compensation income, not credits or deductions.