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richr59 · Feb 10, 2006, 07:30 AM

I understood that there is an agreement between NJ/PA that residents working in the other state will have tax withheld for their state of residence. My employer followed that until this year. I now have PA state tax & local city tax withheld. They also just switched my sui from PA to NJ.

Question 1: Where should I be paying SUI?
Question 2: Am I subject to local PA tax? If not, how do I recover?
Question 3: What is the rate for NJ SUI/SDI in 2006?

Thanks for your help!

AtlantaTaxExpert · Feb 10, 2006, 10:12 AM

1 & 3) I cannot answer your SUI questions. You need to ask a local tax pro.

2) If you work in PA, you will owe PA income taxes. However, NJ will give you a credit for that tax paid, so you get it back that way.

richr59 · Feb 11, 2006, 05:51 AM

Your response to #2 is not correct. PA & NJ have a reciprocal taxing arrangement whereas taxes are withheld for your resident state, not your work state. As it turns out payroll incorrectly withheld PA tax.

SUI is paid to the state you work in. If I were laid off, I would collect unemployment in PA, even though I live in NJ.

Thanks for responding.

AtlantaTaxExpert · Feb 11, 2006, 09:18 AM

A reciprocal tax arrangement? Interesting! First I have heard of it!

I wonder why they do not have a similar arrangement with NY, since far more NJ residents work in NY than probably all the other states combined. Would make tax filing a lot easier for the NJ residents who work in NY. I have several clients for whom I have to prepare both NY and NJ state returns to get their taxes straight. A reciprocal agreement of the nature you speak would correct that requirement.

richr59 · Feb 11, 2006, 12:17 PM

Here is a link to learn more. There probably too much revenue at stake to have it work for NJ/NY!
http://www.state.nj.us/treasury/taxa....htm~mainFrame

sbayoumy · Apr 8, 2007, 12:42 PM

Originally Posted by richr59

Your response to #2 is not correct. PA & NJ have a reciprocal taxing arrangement whereas taxes are withheld for your resident state, not your work state. As it turns out payroll incorrectly withheld PA tax.

SUI is paid to the state you work in. If I were laid off, I would collect unemployment in PA, even though I live in NJ.

Thanks for responding.

I'm somewhat confused about this. I've read about the reciprocal tax law but assume this applies at the State level. I live in NJ, my employer is based in NJ, however I work in PA (satellite office). I pay Fed and NJ state taxes but my local taxes are withheld in PA as well as a nominal UC (1% unemployment compensation tax? For the jurisdiction). When I file my NJ taxes do I claim a credit for the local taxes with held in PA as well as the UC. So confusing.

Thanks in advance.

AtlantaTaxExpert · Apr 17, 2007, 10:44 AM

Yes, you claim the PA taxes paid as a credit against your NJ taxes.

BruceY100 · Aug 1, 2009, 01:33 PM

I live in NJ and have paid the Phila wage tax, which is to my mind is the only reciprocal tax you can apply as credit to your NJ STATE INCOME TAX from PA

BruceY100 · Aug 1, 2009, 01:33 PM

I live in NJ and have paid the Phila wage tax, which is to my mind is the only reciprocal tax you can apply as credit to your NJ STATE INCOME TAX from PA

ebaines · Aug 3, 2009, 08:04 AM

Originally Posted by BruceY100

I live in NJ and have paid the Phila wage tax, which is to my mind is the only reciprocal tax you can apply as credit to your NJ STATE INCOME TAX from PA

Correct! If anyone needs clarification on this, see:
Income Tax - Credit for Taxes Paid to Other Jurisdictions - NJ Taxation

JoeCPA1 · Mar 23, 2011, 04:27 PM

If you live in NJ and work in Philly you can take a credit for the amount you paid into philly. This has nothing to do with the reciprocal agreement.
As to the reciprocal agreement: If you live in New Jersey and PA takes out income tax. You have to file two state returns. On the PA return you have to mention the reciprocal agreement and you will get back all the tax you paid into PA.
Find a good tax accountant and pay him/her will
JoeCPA