I live in NJ and recently started working in Philadelphia. My employer had me sign a reciprical agreement. I understand that that stops them from taking out Pa state tax since I live in NJ but now they are not even taking out NJ state tax. I spoke with my HR department who referred me to the Payroll dept. They, in turn, said that since I pay the city wage tax, I do not pay state tax until I make a "certain" amount of money and then I will start to see state tax coming out of my check. Is this right?? If not, how do I resolve this issue?

If you are working in Philadelphia, you must file Philadelphia tax return and report income earned while in Philadelphia.

You are living in NJ, so for during the period you are in NJ you must report on NJ tax return all the income earned by you worldwide. On the NJ return, you will claim credit for the taxes paid to Philadelphia.

MukatA:

While your post is accurate, it does not answer TerryBada's question.

TerryBada:

The answer is yes, it is NOT unusual for you to receive several paychecks with NO state income taxes withheld until you hit a certain level of income.