GOOD NEWS FOR PENNSYLVANIA RESIDENTS THAT WORK IN NEW JERSEY: Governor Christie to Maintain Income Tax Reciprocity Agreement Between NJ & PA

New Jersey Governor Chris Christie has announced that he will be keeping the income tax reciprocity agreement between New Jersey and Pennsylvania. The Governor previously issued an executive order that would have ended the almost four decade old agreement and made the change effective January 1, 2017. The reciprocity agreement allows commuters to pay state income tax in the state where they live, rather than the state where they work. Ending this agreement would have impacted nearly 250,000 workers in both states, including approximately 125,000 in Pennsylvania. Higher income Pennsylvania commuters into New Jersey would have had to pay higher taxes under New Jersey’s sliding tax rate. Pennsylvania commuters would also have been required to file two state tax returns. Now they can breathe a sigh of relief.