For New Jersey, residents of reciprocal states like Pennsylvania can use Form NJ-165 (Employee’s Certificate of Nonresidence in New Jersey) to claim an exemption from New Jersey state income tax withholding.
Instructions for Using Form NJ-165:
- Who Should Use It:
- Residents of Pennsylvania who work in New Jersey and wish to avoid New Jersey state income tax withholding.
- How to Use It:
- Complete Form NJ-165, certifying that you are a resident of Pennsylvania and requesting exemption from New Jersey tax withholding.
- Submit the completed form to your New Jersey employer to prevent New Jersey income tax from being withheld from your wages.
- Where to Get the Form:
- You can download Form NJ-165 from the New Jersey Division of Taxation website or obtain it from your employer.
- Additional Filing Requirements:
- You are still required to file a Pennsylvania resident tax return and pay taxes to Pennsylvania on the income earned in New Jersey.
By submitting Form NJ-165, you ensure that New Jersey will not withhold state income tax from your paycheck, and you will only need to pay state taxes to Pennsylvania, your home state.
