Are taxes higher in PA or OH?

NJ Resident vs. PA Nonresident Taxes?

• In mid 2009, I joined a new co in PA. I am a NJ resident and a PA nonresident. On my W-2, box 15 states NJ and boxes 16 & 17 are withheld by NJ. That would mean I have paid taxes to NJ. While doing my tax return, I learn that NJ & PA have reciprocity for not taxes twice. However, I keep getting that I owe taxes to PA. I just don't get it. If I have paid withholding tax to NJ and PA & NJ has a reciprocity towards not hitting taxes twice, then why am I still owing taxes. Why isn't the tax that was paid to NJ offsets PA? I should get a tax credit, shouldn't I? It would be the same as if I would have paid PA taxes instead and being a resident to NJ, I would have to pay and PA would have offset it. Where am I going wrong? Please help me understand.

• Answer:

  Withholding is purely temporary. It does not affect how much the government keeps and it does not affect how much you keep. When you file, if NJ was not supposed to keep anything, then it refunds anything that you did pay NJ. If only PA was supposed to get any of your money, then only PA will keep any of your money.