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New Jersey
Employee Obligations (Which Returns YOU Must File)
Pennsylvania has a reciprocity agreement with New Jersey. If your only income from New Jersey is wages, salary, tips, or commissions, file your Pennsylvania return only — no New Jersey return needed. Give your New Jersey employer your reciprocity form (REV-419) each year.
Employer Obligations (What Your Employer Must Withhold & Remit)
Reciprocity applies. If the employee provides the reciprocity form (REV-419), withhold Pennsylvania tax instead of New Jersey tax. Must still register for New Jersey unemployment insurance. Register from day 1 for withholding, unemployment, TDI, FLI, and Workforce Development. Must withhold several employee deductions. NJ COE does NOT apply to Minnesota employees. Unemployment plus WDD ranges from 0.5% to 5.8% plus 0.1175% on the first $44,800. Employer TDI is 0.50%.
City & Local Income Taxes (Extra Filings Beyond the State Return)
Newark charges a 1% payroll tax; nonresidents get a 50% exemption (approximately 0.5% effective rate). This is the only New Jersey city with such a tax.
Other Paycheck Deductions (Disability, Paid Leave, Unemployment)
TDI plus FLI (0.23%) plus employee SUI contributions.
Remote Work Tax Risk — Convenience of Employer (COE) Rule
New Jersey has a reciprocal COE rule — it only applies to residents of Delaware, Nebraska, and New York. Since you live in Pennsylvania, New Jersey's rule does NOT apply to you.
Reciprocity Agreement — File Home State Only for Wages
Pennsylvania has a reciprocity agreement with New Jersey. For wage income, you only need to file your Pennsylvania return. Give your employer the reciprocity form (REV-419) each year to avoid New Jersey withholding.
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This is general information, not tax or legal advice. Laws change frequently. Always consult a licensed CPA or tax attorney for your specific situation. All information researched as of March 21, 2026.