I someone lives in the state of New Jersey, but works in the state of Pennsylvania, do they need to file both a New Jersey and Pennsylvania income tax return for 2005?

JudyM:

What does your W-2 say? Was money withheld from both states, or just PA, or just NJ??

Up until about a week ago I would say that two state returns were needed, but I have been told on this forum that PA and NJ have a reciprocity agreement where if the citizens of one state work in the other that only one tax return would be needed.

I have no first-hand experience on this issue, but if the state's tax rates are about the same, it makes sense to have such an agreement.