A Reciprocity Agreement Between NY and NJ: What You Need to Know

If you live in New York and work in New Jersey, or vice versa, you may be able to benefit from a reciprocity agreement between these neighboring states. This agreement allows residents of one state who work in the other state to pay income tax to their home state only, rather than to both states.

The reciprocity agreement between New York and New Jersey has been in place since 1977, and it applies to both residents and non-residents of these states. Under this agreement, if you live in New Jersey and work in New York, you will only have to pay income tax to New Jersey, even though you are working in New York. The same applies if you live in New York and work in New Jersey.

To benefit from this agreement, you need to file a certificate of non-residence with your employer. This certificate confirms that you are a resident of one state and are working in the other state, and it enables your employer to withhold income tax only for your home state.

It’s important to note that this agreement applies only to income tax. Other taxes, such as property tax, sales tax, and other state-specific taxes, will still need to be paid in the state where they are applicable.

While this agreement can make tax filing easier for those who work across state lines, it’s important to understand its limitations and requirements. To ensure that you are complying with all tax laws, it’s always a good idea to consult with a qualified tax professional.

In conclusion, the reciprocity agreement between New York and New Jersey can be a helpful benefit for those who live and work across state lines. By understanding the requirements and limitations of this agreement, you can ensure that you are accurately and efficiently filing your taxes.