The Pennsylvania Department of Revenue announced that New Jersey is termening its reciprocal agreement with Pennsylvania effective January 1, 2017, requiring individuals to file two income tax returns, and withholding employers for both states beginning in 2017. Residents of Pennsylvania and New Jersey receive a credit for income tax paid on wages earned in the other state. But under a law passed unanimously last week by members of the Senate`s budget and budget committee, state lawmakers would gain the power to prevent at least one governor from taking unilateral action against mutual agreement. Since Governor Christie can use it as leverage to negotiate budget matters, it is possible that this termination will be revoked before it comes into effect. Reciprocity between States does not apply everywhere. A worker must live in a state and work in a state where there is a tax reciprocity agreement. Our mission is to present information so that you can make the best possible decisions. Suppose an employee lives in Pennsylvania but works in Virginia. Pennsylvania and Virginia have mutual agreement. The employee only has to pay public and local taxes for Pennsylvania, not for Virginia.
They respect taxes for the employee`s home state. The new efforts are also underway because lawmakers are pushing Murphy government officials to take a closer look at how New Jersey residents who work in New York and pay income taxes in Albany are affected by the lack of a similar income tax agreement between those two states. “New Jersey would get very good results if we had the same deal (with New York),” said Senator Steve Oroho (R-Sussex). The Bistate Tax Treaty, which dates back to the 1970s, is appreciated by many South Jersey residents and businesses both as a convenience and as a way to enhance economic development.