New Jersey Credit support agreement
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FAQ
New Jersey has a state tax reciprocity agreement with one state: Pennsylvania.
New York has a reciprocal agreement with New Jersey which allows participating merchants selling taxable goods and services across the state line to collect New Jersey's use tax.
Dual State Residents If you are considered to be a resident of both New Jersey and another state for the same period, you can claim a credit based on all income taxed on both the New Jersey and the other state's resident returns, except for any income allocated to New Jersey.
A reciprocal agreement is an agreement between two states that allows employees that work in one state but live in another to request exemption from tax withholding in their employment state.
NJ/PA Reciprocal Agreement New Jersey residents can claim a credit for taxes paid to Pennsylvania on other types of income (for example, business income) that are taxable in both states by completing Schedule NJ-COJ.
If you live in Wilmington or any part of Delaware and work out of state, you MUST file returns in both states. In fact, if you are a daily commuter, your employer might have to automatically withhold taxes in both states. This is due to an agreement to help understand interstate commerce.
If you are a Pennsylvania resident and New Jersey Income Tax was withheld from your wages, you must file a New Jersey nonresident return to get a refund. To stop the withholding of New Jersey Income Tax, complete an Employee's Certificate of Nonresidence in New Jersey (Form NJ-165) and give it to your employer.
