South Jersey into Philadelphia

Live in New Jersey, work in Pennsylvania (2026)

Whether the two states have a reciprocity agreement, which form stops the withholding, and what your paycheck actually looks like after both states and any local tax have taken their share.

Is there a reciprocity agreement?

Yes. New Jersey and Pennsylvania have a reciprocity agreement, so Pennsylvania takes $0 of state income tax from you. File PA Form REV-419 with your employer. But if you work in Philadelphia, the city wage tax is not covered, and it costs $3,425 at $100,000.

This is the corridor where the right answer and the obvious answer part company. New Jersey and Pennsylvania have had a reciprocity agreement for decades, and it does what agreements do: Pennsylvania does not tax your wages at all. File PA Form REV-419 with your employer, and Pennsylvania withholding stops. Your state tax is $4,180, paid entirely to New Jersey, and it is the same $4,180 you would have paid working at home. So far, so simple. Then you take a job in Philadelphia, and the agreement stops helping. Philadelphia levies a wage tax that has nothing to do with Pennsylvania's income tax, sits outside the statewide Act 32 system, and has no reciprocity with anybody. It reaches every dollar you earn inside the city. At $100,000 it takes $3,425 from you, and the reciprocity form you filed does not touch it. Set against that, working in Pennsylvania quietly drops New Jersey's disability and family-leave deductions, since those follow the job across the river, and that trims the damage. Net of both, the commute costs you $2,815 a year.

At $100,000 single filer, against working at home in New Jersey

This commute costs you $2,815 a year. Take-home is $71,575, against $74,390 working at home.

Computed from the tax engine with 2026federal brackets, FICA, both states' income tax, and any local tax at either end. Standard deduction, no pre-tax contributions.

Who taxes you, and how much?

Single filer at $100,000, 2026 rules.

Tax	Amount
Pennsylvania income tax (work state)	$0
New Jersey income tax (resident state)	$4,180
Combined state income tax	$4,180
Philadelphia, PA local tax	$3,425

How the New Jersey and Pennsylvania rule works

Separate the two taxes in your head and the whole thing becomes clear. The state agreement governs Pennsylvania's personal income tax, and Form PA Form REV-419 switches it off for you. Philadelphia's wage tax is a municipal levy, imposed by the city under its own authority, and no state agreement was ever written to cover it. Your employer withholds it regardless of what you file. There is a small mercy in the rate: Philadelphia charges nonresidents 3.425%, which is below what it charges its own residents, so working in the city is cheaper than living in it. There is no credit on the New Jersey side for what Philadelphia takes, either. New Jersey's credit covers income taxes paid to other states, and Philadelphia's is a city tax rather than a state one. It is simply a cost. The city steps its rate down slightly each July, so the figure moves a little from year to year without ever going away.

The local tax the agreement does not cover

The Philadelphia wage tax is what brought most people to this page, so here is the number plainly: $3,425 a year at $100,000, withheld at the nonresident rate of 3.425%. It is owed in full even though your Pennsylvania state tax is $0. Both of those statements are true at once, and calculators that zero out one along with the other are wrong by $3,425 a year. If your Pennsylvania job is outside Philadelphia and outside any Act 32 municipality that levies an earned income tax, none of this applies.

What this estimate covers

These figures apply 2026 federal brackets after the standard deduction, FICA, New Jersey's income tax, Pennsylvania's income tax where the agreement does not remove it, and the local tax at each end of the commute. State-administered payroll programs such as disability and paid family leave follow the work state, so where Pennsylvania runs them they come out of your check on Pennsylvania's schedule rather than New Jersey's. They assume every workday is spent in Pennsylvania and all of your wages are earned there.

One limit is worth naming. A split week, with some days worked from home, is not modelled: the credit, the local tax and the work-state payroll programs would each be apportioned across the two states, and this estimate treats the whole year as Pennsylvania work.

Living in New Jersey and working in Pennsylvania: FAQ

Does New Jersey have reciprocity with Pennsylvania?

Yes. It is one of the longest-standing agreements in the country. File PA Form REV-419 with your Pennsylvania employer and no Pennsylvania income tax is withheld. Your wages are taxed by New Jersey alone, exactly as if you had never crossed the river.

Do I still pay the Philadelphia wage tax?

Yes, in full. Reciprocity covers Pennsylvania's state income tax and nothing else. Philadelphia sits outside the state's Act 32 system entirely and has no reciprocity with any state, so the certificate you filed has no effect on it. At $100,000 the city takes $3,425 from you.

Why is my Philadelphia rate lower than my colleague's?

Because they live in the city and you do not. Philadelphia charges nonresidents 3.425%, a lower rate than residents pay, since part of the resident tax does not follow someone who lives outside the city limits. Commuting in is cheaper than moving in.

Can New Jersey credit me for the Philadelphia tax?

No. New Jersey's credit is for income taxes paid to other states, and Philadelphia's is a city tax. Pennsylvania takes $0 from you, so there is no state tax to credit in the first place. The wage tax is a straightforward cost of working in the city.

What if my Pennsylvania job is not in Philadelphia?

Then check whether the municipality levies an Act 32 earned income tax, because many do and reciprocity does not cover those either. If it does not, the commute costs you nothing and can edge ahead: Pennsylvania takes no income tax and the job sheds New Jersey's payroll deductions, while New Jersey taxes your wages exactly as always.

What happens if I never file the exemption form?

Pennsylvania withholds its income tax from every paycheck, and you have to file a Pennsylvania return to claim it back. The money is recoverable but the delay is real. File PA Form REV-419 with your employer as soon as you start.

This estimate is for planning purposes only and does not constitute tax or financial advice. Actual paycheck withholding depends on your employer's payroll system, custom W-4 elections, additional income, and personal tax situation. For specific tax-planning decisions, consult a licensed CPA or tax professional. Cross-state estimates additionally assume all wages are earned in the work state and exclude any apportionment of remote workdays.

How This Page Is Reviewed

The New Jersey to Pennsylvania commute rule is taken from each state's own reciprocity guidance and withholding forms, and is reviewed against those primary sources before each tax-year update. Local tax figures come from the municipal research files behind the city pages.

Reviewed by

PaycheckCalc Research Desk

Last reviewed

2026-07-15

Primary sources