City Wage Tax & State Income Tax question. (credit, home)

[NatasNJ]

If you live in NJ and take a job in Philadelphia City limits I assume you have to pay the non-resident City Wage tax which I believe is 3.49% of your salary.

Does that salary still get hit paying NJ State Income Tax as well?

Trying to figure out the difference from Living in NJ and working in NJ then to Living in NJ and working in Philly and what salary one would have to make to take home the same pay.

[frankgn87]

Originally Posted by NatasNJ

If you live in NJ and take a job in Philadelphia City limits I assume you have to pay the non-resident City Wage tax which I believe is 3.49% of your salary.

Does that salary still get hit paying NJ State Income Tax as well?

Trying to figure out the difference from Living in NJ and working in NJ then to Living in NJ and working in Philly and what salary one would have to make to take home the same pay.

no, PA and NJ have an agreement to only tax your income once..

[templeu]

You should talk with your HR dpt. There is paperwork you have to complete if you live in NJ and work in Phila (or vice versa). As it's been explained to me, what you pay sort of depends on your salary and what tax bracket you are in in NJ, since NJ does not have a flat state tax like PA does. I'm not terribly familiar with all of the brackets in NJ (other than the one I fall into), but supposing you are in the 3.5% NJ bracket (if there is one), then essentially you wouldn't pay NJ taxes. If you are in say a 6% bracket, you would pay your 3.49% in Phila wage tax and then pay the remaining 2.51% in NJ state tax. At least that's how I've read it and how it's been explained to me.

[NatasNJ]

I get confused due to this.

I work in NJ. Live in NJ.
Wife works in NJ. Lives in NJ.
We both pay NJ state income tax.

Lets say that changes.

I work in PA (City Limits) still live in NJ.
Wife works and lives in NJ still.

So would I start paying BOTH PA & NJ state in come tax AND City wage tax?
Then whatever I pay there is offset off what my NJ taxes would be?
On the surface very tough to make sense of it.

[templeu]

You would not pay PA tax, but you would pay the out of area Phila wage tax.

You would have to figure out what your NJ rate is. If it is higher than 3.49%, then that %age difference would be taxed by NJ... Again, this is just how my HR dpt explained it to me. I found this explanation on a tax website:

"Because you work in Philadelphia, your wages are subject to Philadelphia tax. You're not subject to PA taxes because NJ has a reciprocal agreement with PA. No such agreement exists with Philadelphia. Your employer should be withholding the Philadelphia tax. The Philadelphia tax is eligible for the credit for taxes paid to other jurisdictions. Therefore, it will lower your NJ tax. Generally, your NJ filing status is required to be the same as it is for federal tax purposes"

[NJGOAT]

I worked in Center City and lived in NJ for a few years. You pay your regular state income tax to NJ. You DO NOT pay PA state income taxes. However, if you are within the city limits you do pay the non-resident city wage tax.

So, you pay NJ state income taxes like normal and you pay city wage tax. However, the bonus here is that all of the city wage taxes you pay are deductible against your NJ state income taxes. You essentially get everything you paid in city wage taxes back from the state of NJ assuming you paid enough in to get it all back.

Some people that I worked with that had been doing this for a long time, simply adjusted their witholding so that they netted to near zero on the NJ taxes and they avoided the double dip of city wage and state income taxes.

[kkilleri]

I live in Philly and work in Ridley Park. My employer is not deducting my city taxes. I am holding 4% of my salary and putting it into a separate account. I would like to send in money quarterly or better yet, monthly. Would anyone know where I could send it?

Is there a web-site with my information to be sure that I am holding or sending enough? With a full family to care for I don't want to be tempted to pull from this account for survival.

Thank you.