Pennsylvania into New Jersey

Live in Pennsylvania, work in New Jersey (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. The New Jersey and Pennsylvania agreement runs both ways, so New Jersey takes $0 of income tax from a Pennsylvania resident. File NJ Form NJ-165 with your New Jersey employer. Your state tax stays at $3,070, paid to Pennsylvania. But a New Jersey job withholds New Jersey's payroll programs, so the commute costs you $610 a year.

Heading the other way across the Delaware is the cleanest commute in this set on the income-tax side. The agreement between the two states is mutual, so a Pennsylvania resident working in New Jersey is taxed by Pennsylvania and by nobody else on their wages. Hand NJ Form NJ-165 to your New Jersey employer and New Jersey withholding never starts. At $100,000 as a single filer, your state tax is $3,070, Pennsylvania's flat rate applied to the whole of your wages, and New Jersey's share is $0. There is no credit to calculate and no nonresident return to file. What the agreement does not reach is payroll. New Jersey's disability, family-leave and unemployment programs follow the job, not the home, so a New Jersey employer withholds them from a Pennsylvania commuter that a Pennsylvania job never would. That is roughly $610 a year, which is why take-home lands at $75,500 rather than the $76,110 you would keep working at home in Pennsylvania. The figures here are for a Pennsylvania resident outside Philadelphia.

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

This commute costs you $610 a year. Take-home is $75,500, against $76,110 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
New Jersey income tax (work state)	$0
Pennsylvania income tax (resident state)	$3,070
Combined state income tax	$3,070

How the Pennsylvania and New Jersey rule works

Reciprocity here is genuinely bilateral, which is not true of every pair on this site. New Jersey publishes Form NJ Form NJ-165 for Pennsylvania residents; Pennsylvania publishes REV-419 for New Jersey residents. Each state has agreed not to tax the other's residents on compensation, and the certificate is what tells your employer to stop withholding. File it on your first day. If you do not, New Jersey withholds its income tax and you spend April filing a New Jersey nonresident return to get it back, which is money you were never going to owe. One asymmetry is worth knowing about, because it does not run in your favour: a Pennsylvania resident keeps paying any local earned income tax their own municipality levies, since Act 32 taxes residents on all earned income no matter where it was earned. So a Bethlehem or Allentown resident carries their home rate across the river with them, and the agreement does nothing about it.

What this estimate covers

These figures apply 2026 federal brackets after the standard deduction, FICA, Pennsylvania's income tax, New Jersey'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 New Jersey runs them they come out of your check on New Jersey's schedule rather than Pennsylvania's. They assume every workday is spent in New Jersey 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 New Jersey work.

Living in Pennsylvania and working in New Jersey: FAQ

Is the Pennsylvania and New Jersey agreement mutual?

Yes. It works in both directions and always has. A Pennsylvania resident files NJ Form NJ-165 with a New Jersey employer; a New Jersey resident files REV-419 with a Pennsylvania employer. Each state agrees not to tax the other's residents on their wages.

How much New Jersey tax do I pay?

None whatsoever. New Jersey's income tax on your wages is $0, which is what an agreement means in practice, and your entire state bill of $3,070 goes to Pennsylvania. New Jersey does still take its payroll deductions from the job, though, so take-home of $75,500 sits a little under the $76,110 you would keep at home.

Do I file a New Jersey tax return?

Not if the exemption certificate is on file and no New Jersey tax was withheld. With nothing withheld and nothing owed, there is no return to file. If your employer withheld New Jersey tax by mistake, you file a nonresident return purely to recover it.

Do I still owe my local Pennsylvania earned income tax?

Yes. Act 32 local taxes are levied on residents on all earned income, wherever it is earned, so your home municipality's rate still applies to your New Jersey wages. The state agreement covers Pennsylvania's income tax and does not reach local ones.

What if I forget to file the exemption form?

New Jersey withholds from every paycheck until you do. Nothing is lost permanently, since you can file a New Jersey nonresident return and claim it all back, but you have handed Trenton an interest-free loan for a year. File NJ Form NJ-165 on day one.

Does this cover self-employment income?

No. The agreement covers compensation, meaning wages and salary paid to you by an employer. Business or self-employment income earned in New Jersey falls outside it entirely, and New Jersey may tax that income even though it does not tax your salary.

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 Pennsylvania to New Jersey 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