Just Kidding – New Jersey Reverses Course and Reinstates Reciprocal Tax Agreement with Pennsylvania

By the WeiserMazars Tax Practice Board

On September 2nd, New Jersey Governor Chris Christie had notified Pennsylvania officials that he had ended a 38 year-old agreement that allowed New Jersey and Pennsylvania residents to pay income taxes where they reside, rather than where they work. This change was to be effective January 1, 2017 (see prior WeiserMazars Alert dated September 6, 2016 here).

On Tuesday, November 22nd, Governor Christie announced that he rescinded his prior withdrawal from the reciprocal agreement. A return to the status quo will allow New Jersey and Pennsylvania residents that earn salary income to continue to pay income taxes only where they reside, and withholding rules will continue as they have in the past.