PA resident earned wages in NJ. NJ taxwitheld on a portion of the wages. Pa return is picking up that amount as taxable state wages.

[joggergirl123]

No PA tax was withheld on the w2. shouldnt  PA taxable wages be difference between federal and NJ wages?

[sjrcpa]

No. A PA resident is taxable in PA on all of their wages.

IF PA and NJ play nice, client gets a credit on PA return for tax paid to NJ.

[GodFather]

The W2 is showing NJ Wages for the PA Resident?  NJ and PA have a reciprocity agreement.  If your client made their employer aware of his residency, the employer would have withheld PA Tax instead of NJ.  Under the circumstances you describe, it sounds like your client will need to file a New Jersey NR with no income to obtain the portion of NJ withholdings.  You would then also provide PA with a copy of the NJNR you filed.  Not sure your client is eligible for a credit on PA due to the reciprocity agreement.  

[sjrcpa]

Thanks. I didn't know if they had a reciprocity agreement. Since they do, I agree no credit on PA return.

[GodFather]

Occasionally I surprise myself and I am somewhat right.   😊

[PATAX]

Pennsylvania has reciprocal agreements concerning wages with Maryland, New Jersey, Virginia, Indiana, Ohio, and West Virginia. Not sure if list has been changed or updated since I have not received my 2023 PA tax handbook yet. 

[IRonMaN]

"Occasionally I surprise myself and I am somewhat right"

Yeah, I had that happen once in 1997.

[GodFather]

"Occasionally I surprise myself and I am somewhat right"

Yeah, I had that happen once in 1997.

You're due...2023 may be your year.  

[Skylane]

If I understand the thread correctly, the NJ employer should not have taken NJ withholdings for a PA resident because of reciprocity. I’m pretty sure you’re going to have to file a NJ NR return to get the money back from NJ…. @Accountant-Man  can best help 

[Accountant-Man]

PA resident has all wages taxed in PA. PA wages are typically higher than federal wages since retirement deferrals are taxed as wages in PA.

PA resident has zero NJ wages, even if worked 100% in NJ. If NJ employer refuses to withhold PA taxes, and they can, then TP has to pay PA estimates.

All NJ tax withheld needs a NJ NR return to get back the NJ tax. You should attach a copy of PA to prove it to NJ.

You CANNOT get tax credits from other jurisdictions for NJ tax nor PA tax, since it is illegal for NJ tax to be owed by PA resident who is a NJ employee.

[FTAX]

You might want to delete this comment.  Anyway, many employers will not co-operate and continue to withhold taxes for the wrong state in these situations between PA & NJ.