Live in Pennsylvania, Work Remotely for a New Jersey Employer: Who Taxes You?
Answer
Only Pennsylvania taxes you. New Jersey levies no personal income tax on wages, so nothing is withheld there and you file no New Jersey return. Pennsylvania taxes its residents on all income wherever earned, which means your New Jersey earnings go on a Pennsylvania resident return in full.
Last verified
The instinct that working in a no-tax state means paying no tax is the single most expensive misunderstanding in this niche. New Jersey takes nothing, but Pennsylvania still taxes residents on income earned anywhere, so the full amount lands on your Pennsylvania return.
What you file
- 1Resident return · Pennsylvania
File a Pennsylvania resident return reporting all of your income.
The two states, side by side
| Pennsylvania | New Jersey | |
|---|---|---|
| Taxes wages | Yes — flat | Yes — graduated |
| Reciprocity partners | 6 (Form REV-419) | 1 (Form NJ-165) |
| Convenience rule | Yes — general rule | Only against convenience-rule states |
| Nonresident return | Form PA-40 (nonresident) | Form NJ-1040NR |
| Credit for other-state tax | Schedule G-L | Schedule NJ-COJ |
| Nonresident safe harbour | None published | None published |
| Local income tax | Yes | No |
| Revenue department | Pennsylvania Department of Revenue | New Jersey Division of Taxation |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in New Jersey and working in Pennsylvania gives:Home state only.
Same two states, different situation
The withholding answer turns on how you are paid and where the work happens, not only on which two states are involved.
- W-2 commuter: Pennsylvania → New JerseyReciprocal agreement — file the exemption form
- 1099 contractor: Pennsylvania → New JerseyHome state, plus the client state if you work there
- Moved mid-year: Pennsylvania → New JerseyTwo part-year returns
Other Pennsylvania pairs
Questions people actually ask
I live in Pennsylvania and work remotely for a New Jersey employer. Which state do I pay?
Only Pennsylvania taxes you. New Jersey levies no personal income tax on wages, so nothing is withheld there and you file no New Jersey return. Pennsylvania taxes its residents on all income wherever earned, which means your New Jersey earnings go on a Pennsylvania resident return in full.
Which state should my employer be withholding for?
Pennsylvania. Your employer should withhold Pennsylvania tax rather than New Jersey tax on these wages. If a New Jersey line is showing on your pay stub, raise it with payroll now rather than at filing time.
Does my New Jersey employer's location alone create a New Jersey tax obligation?
No. New Jersey sources wages to the place where the work is physically performed, and it does not apply a convenience-of-the-employer rule that would override that. Days you actually spend working inside New Jersey are a different matter — those are New Jersey-source income and can require a nonresident return.
How current is this?
The Pennsylvania and New Jersey rules on this page were last checked against Pennsylvania Department of Revenue and New Jersey Division of Taxation on 2026-08-07. We re-check the full grid every December after state legislative sessions close, and re-check the convenience-of-the-employer states quarterly because that is where the rules move fastest.
Sources
Every fact above comes from the revenue department that publishes the rule. We do not cite secondary summaries, and we do not restate a figure we could not find at source.
- Pennsylvania Department of Revenue — individual income taxaccessed 2026-08-07
- Pennsylvania — Form REV-419accessed 2026-08-07
- Pennsylvania Personal Income Tax Guide — Income Subject to Tax Withholdingaccessed 2026-08-07
- New Jersey Division of Taxation — individual income taxaccessed 2026-08-07
- New Jersey Division of Taxation — Convenience of the Employer Ruleaccessed 2026-08-07