Are taxes lower in PA than NJ?

Pennsylvania’s sales tax rate is 6%. New Jersey’s tax rates start at 1.4% and rise up to 10.75% for income over $5 million, Kiely said. Pennsylvania has a single tax bracket of 3.07%. “In New Jersey, a single person with over $35,000 in taxable income would be at the 3.5% tax rate,” he said.

Do you Gile both W-2 from the same employer if you live in Pennsylvania but work in New Jersey?

Pennsylvania and New Jersey have a reciprocal tax agreement for W-2 income. Under the reciprocal agreement you pay income tax only in the state that you live in. In your case, you do not have to file a New Jersey tax return. The employer’s address doesn’t matter.

Are taxes better in NJ or PA?

Pennsylvania’s flat tax rate, compared with New Jersey’s progressive rates based on income, is more advantageous the more you make. Working for a New Jersey company but living in Pennsylvania can save high-income households a significant amount.

Do you live in NJ but work in PA?

If you lived in NJ the entire tax year, and worked in PA, your W-2 wages are not subject to PA taxes. For tax purposes, your PA wages are considered NJ income, and are fully taxable by NJ. If this is your situation, you would answer No in the Personal Info section of TT to the question about having Other State Income.

How to get a Pennsylvania tax credit W2?

On the Pennsylvania Credit screen, check the first box about Philadelphia and say NO. Enter the local wages (double-taxed income) and taxes paid to Philadelphia from your W2. This will calculate your credit. Click PDF below for images.

Is there tax reciprocity between NJ and PA?

PA and NJ have tax reciprocity with regard to W-2 wages. If you lived in NJ the entire tax year, and worked in PA, your W-2 wages are not subject to PA taxes. For tax purposes, your PA wages are considered NJ income, and are fully taxable by NJ.

Do you have to file a PA tax return if you work in NJ?

The only reason you’d have to file a non-resident PA return is if your employer mistakenly withheld PA taxes, or if you had PA income other than W-2 wages, such as rental income from a property located in PA. PA-NJ reciprocity applies only to W-2 wages, not to any other type of income.