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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/taxation/index.html?njit25.htm~mainFrame

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...

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...