Client is a Full Year resident of NJ and worked the entire year in PA.  Client's employer withheld PA taxes instead of NJ taxes.  I completely understand that NJ residents are not subject to PA income tax under the terms of the Reciprocal Personal Income Tax Agreement between the states.

First I prepared the Federal Return and filled in the information for PA income on the Nonresident State Allocation Wks.  Then I completed the Nonresident State Return(PA) which is showing a Zero Balance due.  I proceeded to client's Resident State Return(NJ) which calculates the client owing $2,950.00 because no NJ taxes were withheld.  On the clients W2 $2,467 of PA taxes were withheld. 

I thought when I selected PA as the Nonresident State and filled in Nonresident State Allocation Wks that the information would flow throughout the rest of the return.

Here are my questions:

-On the NJ return, can I complete Schedule NJ-COJ for taxes paid to the jurisdiction of PA?

This would create a credit in the amount of PA taxes withheld ($2,467) which will reduce the client's balance due.

- If this is not the solution, can someone please provide guidance in such  a scenario?

Any help would be greatly appreciated.

Thanks,

Angel