Reciprocal Agreement Pa And Nj

The Pennsylvania Revenue Department announced that New Jersey is ending its reciprocity agreement with Pennsylvania effective January 1, 2017, which requires individuals to file two income tax returns and withhold employers for both states starting in 2017. Residents of Pennsylvania and New Jersey receive a credit for income tax paid on wages that are earned in the other state. Pennsylvania requires proof that taxes were paid to the other state. You must print the return of the AP with a copy of the return of the state of New Jersey, the W-2 (s) with the AP income and a statement in which you reside in a reciprocal state, and send it by email. To be exempt from future PA deductions, submit the REV-419 form to your employer. „Given the unprecedented circumstances that would emerge from the virus, if there were to be a debate on the dissolution of the agreement in the future, this legislation will ensure that the legislative branch and especially those affected by the agreement – taxpayers and businesses – have a voice in this process,“ said Renna. This is particularly advantageous for Pennsylvania residents, who pay a flat-rate national income tax rate of 3.07 percent, compared to New Jersey`s progressive tax, which ranges from 1.4 percent to 8.97 percent for those earning more than $500,000. New Jersey residents, who are in the lowest income tax class and work in Pennsylvania, also pay less public taxes. The agreement also allows New Jersey residents to obtain an income tax credit from Philadelphia City.

On November 22, 2016, Governor Christie changed course and said he would not pull the agreement on Pennsylvania`s reciprocal income tax in New Jersey. According to a statement, health care reforms would generate $200 million in savings next year, allowing Governor Christie and his government to „save“ the agreement. The new efforts also come, as lawmakers urge Murphy`s administrators to take a closer look at how New Jerseyers who work in New York and pay income taxes in Albany are influenced by the lack of a similar income tax agreement between the two states.