I live in NJ but work in Philadelphia. My w2 has no state tax info, but a Philadelphia wage tax. Is this normal, and how does this affect my nj state return?

[dmklarin]

I did this and it still says the tax credit is 0 in nj

[KrisD15]

Yes, if you file a New Jersey resident tax return and you pay state tax to a different state for the same income, (not the amount withheld, the amount of the tax liability) you will see a credit for that double taxation on your New Jersey return. 

To have the numbers flow properly in TurboTax, the non-resident return must be done first, then the tax on the income claimed a second time on the New Jersey return will be credited, up to the same amount New Jersey would assess. 

[4notlater]

i need a nj 2019 form nj-coj for wages in pd=hiledelpia of 42,000 and city wage of 1200 dollars takes out- 

[DaveF1006]

First of all, I must be the bearer of bad news.  Turbo Tax does not support filing Philadelphia City Taxes and you will need to file a Philadelphia City Tax return to get some of that money you paid for taxes. Here is a city of Philadelphia website to file a free tax return for the city of Philadelphia.

What you will need to do in Turbo Tax is file a PA non-resident return and file a resident NJ return in that order. When you file your PA return first, the taxes you paid to PA will credit to your NJ return. 

Philadelphia local wage tax is separate from your PA state return and there is no available deduction for these taxes on your state return. However, this amount would be a deduction from your federal return as a local income tax paid on Schedule A if you are itemizing your deductions.

[ecrens2020]

Hi Dave

This was helpful as I work in the City of Philadelphia and live in NJ.  My W2 shows small portion collected by State of NJ, but a larger portion collected by City of Philadelphia.  However, no tax is collected by State of PA, only the City.  
According to your resolution, we would have to file non-resident return for PA, then NJ (in that order).  Challenge is we did not have any taxes collected by State of PA.  Since Turbo Tax does not support (which we were not aware), what do we do?  Its been this way for several years in which we have filed using Turbo Tax, but continue to owe NJ every year (double taxed).

How can we resolve?

[SteamTrain]

@ecrens2020 

No, you've been doing it right all along  (the post/answer just above yours appears to need some major modification). 

As a NJ resident, you would only file a PA non-resident tax return if, as a W-2 employee, your PA employer withheld PA state taxes, and then you would only do that to get the improper PA withholding refunded (effectively you have zero PA income)

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Back in late 2016, NJ was going to eliminate tax reciprocity between NJ and PA, but then it was rescinded before 2017 started.  So NJ-PA tax reciprocity is still in effect.

Read the "NJ/PA Reciprocal Agreement" at:

https://www.state.nj.us/treasury/taxation/njit14.shtml

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Since that NJ-PA reciprocity agreement  is still in effect, you only file a NJ resident tax return, as long as no PA state taxes were withheld for that W-2 job in Philadelphia, and you get to take a credit on the NJ tax return for the taxes withheld for Philadelphia.  (Philadelphia and PA are entirely different tax authorities, i.e. there is no NJ-Phila. reciprocity)  

No Philadelphia tax return is required for you as a NJ resident, since your employer handled it on your W-2 withholding ( I think this is correct..?   @maglib    @re2boys  @rjs     @retiree     one of you knows for sure ). 

_____

And to be clear, TTX software does allow -preparation of PA-State tax returns (not that you need it ) ... but TTX  maybe/probably does not prepare Philadelphia tax returns...those are two different tax authorities.

__________________________

IF you end up owing NJ a lot every year, talk to your employer/payroll/HR about preparing and giving them a new form to have NJ withholding increased.  Probably an NJ-W4, with fewer allowances than you are using now, or an additional $$ amount on line 5 of the form:

https://www.state.nj.us/treasury/taxation/pdf/current/njw4.pdf

[RubenO]

Hey! @SteamTrain  Thank you for the information provided, I will go ahead and close this thread to make sure that any other comments are up to date with the correct information. Thanks!