Live in New Jersey, Work in Pennsylvania: Which State Taxes Your Paycheck?
Answer
File Form REV-419 and Pennsylvania takes nothing. Under the reciprocal agreement between New Jersey and Pennsylvania, wages you earn in Pennsylvania are taxable only by New Jersey. The certificate goes to your employer rather than to a revenue department, and it turns two potential returns into one.
Last verified
A reciprocity agreement is a deal between two revenue departments about which of them withholds. Around thirty such agreements exist across sixteen jurisdictions, and New Jersey and Pennsylvania hold one — which is why this commute produces one return instead of two.
Pennsylvania holds agreements with Indiana, Maryland, New Jersey, Ohio, Virginia and West Virginia. A resident of one of those states working in Pennsylvania files Form REV-419, Employee's Nonwithholding Application Certificate, with the Pennsylvania employer — and unless the state of residence changes, it does not have to be refiled each year.
The certificate goes to your employer's payroll department, not to Pennsylvania Department of Revenue, and it is not retroactive — filing it in June does not recover Pennsylvania tax withheld in January. That money comes back only by filing a Pennsylvania nonresident return for the year and claiming a refund.
Pennsylvania also has a layer below the state one, and it is the layer that survives every agreement: Pennsylvania's Act 32 earned income tax is levied by municipalities and school districts across the state, and Philadelphia levies its own wage tax on residents and on nonresidents who work in the city. None of it is covered by the reciprocal agreements, and Philadelphia's nonresident wage tax applies from the first dollar.
What you file
Give your employer Form REV-419 so Pennsylvania stops withholding. This goes to the employer, not to Pennsylvania Department of Revenue — and it is not retroactive, so file it before the first paycheck of the year.
- 2Resident return · New Jersey
File a New Jersey resident return reporting all of your income, including the wages earned in Pennsylvania.
The two states, side by side
| New Jersey | Pennsylvania | |
|---|---|---|
| Taxes wages | Yes — graduated | Yes — flat |
| Reciprocity partners | 1 (Form NJ-165) | 6 (Form REV-419) |
| Convenience rule | Only against convenience-rule states | Yes — general rule |
| Nonresident return | Form NJ-1040NR | Form PA-40 (nonresident) |
| Credit for other-state tax | Schedule NJ-COJ | Schedule G-L |
| Nonresident safe harbour | None published | None published |
| Local income tax | No | Yes |
| Revenue department | New Jersey Division of Taxation | Pennsylvania Department of Revenue |
| Last verified |
The other direction
Reversing the commute does not always reverse the answer. Living in Pennsylvania and working in New Jersey gives:Reciprocal agreement — file the exemption form.
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.
- Remote worker: New Jersey → PennsylvaniaHome state only
- 1099 contractor: New Jersey → PennsylvaniaHome state, plus the client state if you work there
- Moved mid-year: New Jersey → PennsylvaniaTwo part-year returns
Other New Jersey pairs
Questions people actually ask
I live in New Jersey and work in Pennsylvania. Which state takes the tax out of my paycheck?
File Form REV-419 and Pennsylvania takes nothing. Under the reciprocal agreement between New Jersey and Pennsylvania, wages you earn in Pennsylvania are taxable only by New Jersey. The certificate goes to your employer rather than to a revenue department, and it turns two potential returns into one.
Which state should my employer be withholding for?
New Jersey. Your employer should withhold New Jersey tax rather than Pennsylvania tax on these wages, but only once you have given payroll Form REV-419 — the exemption is not automatic and it does not apply retroactively. If a Pennsylvania line is showing on your pay stub, raise it with payroll now rather than at filing time.
What if Pennsylvania tax was already withheld from my pay?
File Form REV-419 with your employer to stop it going forward, then recover what was already taken by filing a Pennsylvania nonresident return for that year and claiming a refund of the full amount. New Jersey will still expect its own tax on the same wages, so do not treat the refund as a windfall.
How current is this?
The New Jersey and Pennsylvania rules on this page were last checked against New Jersey Division of Taxation and Pennsylvania Department of Revenue 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.
- New Jersey Division of Taxation — individual income taxaccessed 2026-08-07
- New Jersey Division of Taxation — Convenience of the Employer Ruleaccessed 2026-08-07
- 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