The end of the Pennsylvania and New Jersey tax reciprocity agreement, which has been in place for more than 40 years, has caught many residents of both states off guard. As of January 1, 2017, the agreement was terminated, meaning that commuters who work in one state and live in the other will no longer be able to file a single tax return.
For those who have been taking advantage of the reciprocity agreement, this news may come as a shock. Many people have come to rely on the convenience of filing a single tax return, and may not be prepared for the added hassle and expense of filing in two separate states.
Some experts predict that this change could have a significant impact on the economies of both states. With commuters having to pay taxes to both states, it`s possible that some may choose to look for work closer to home, or even move to a different state altogether. This could result in a loss of tax revenue and a decrease in economic activity.
So why did the two states decide to end the reciprocity agreement in the first place? According to officials, the move was made to help balance the budgets of both states. New Jersey was facing a significant budget shortfall, and officials believed that ending the reciprocity agreement would help close that gap.
While this may be a difficult pill to swallow for some, there are some things you can do to make the transition a little smoother. First and foremost, it`s important to understand the tax laws of both states and how they apply to you. This may involve consulting with a tax professional or doing some research on your own.
It`s also a good idea to start keeping careful records of your income and expenses in both states. This will help you accurately calculate how much you owe in taxes to each state, and will also make it easier to file your tax returns.
Finally, it`s important to stay informed about any changes to the tax laws in either state. As with any change, there may be some confusion and uncertainty in the coming months, but staying up-to-date will help you navigate these changes more easily.
The end of the Pennsylvania and New Jersey tax reciprocity agreement may be a difficult adjustment, but it`s important to remember that you`re not alone. Many other residents of both states will be going through the same thing, and there are resources available to help you through the transition. With a little patience and preparation, you can successfully navigate this change and continue to thrive in both states.