I live in NJ and just started a job in Philadelphia. My first paycheck has ~3% of my gross income withheld for NJ Withholding Tax AND ~3.6% of my gross income withheld for Philadelphia NR Withholding Tax.
Am I being double taxed?
asked 16 Mar '12, 19:22
NO, you are being subjected to double withholding. Many states in the Mid-Atlantic area, specifically MD, VA, WV, PA & DC, have reciprocal tax agreements in place. Meaning that if I work in Maryland but live in VA, MD won't tax my wages.
Some states, like DE, do NOT participate in any reciprocal agreements with anyone. I actually do live in DE and work in MD. So I have to file a MD nonresident income tax return and pay tax to MD. Then I file a DE RESIDENT return, calculate my tax to DE and get to claim a credit for some of the taxes I had to pay to MD on the same income.
I am NOT familiar with how PA and NJ interact. You'll need to check the instructions for BOTH states to see exactly how to proceed. My best professional guess is that you will need to file in BOTH states.
answered 20 Mar '12, 11:11