The Payroll Factory, Inc. May 2022 Newsletter
Congrats on surviving tax season. As the calendar moves to May, the newsletter
will focus on payroll tax reciprocity agreements. Pennsylvania has 6 state reciprocity
agreements with Indiana, Ohio, Virginia, West Virginia, Maryland and New
Jersey. New Jersey only has one state
reciprocity agreement and that is with Pennsylvania.
These agreements between the states lowers the tax burdens
on employees who commute to work across state lines. The employee is thus exempt from state taxes
in the state they work.
New Jersey employees who work in Philadelphia only have
deducted Philadelphia non-resident tax from their pay. Those employees get a credit toward their New
Jersey Gross Income Tax.
It is important that companies and organizations set up the
correct state withholding/income tax deduction per employee based on the
residency of the employee. The rule of
thumb has always been that state income tax is taken out based on residence and
unemployment based on employer location.
Please feel free to circulate to your clients and
associates. As always “whatever it
takes,” I look forward to working with you, your associates and above all your
clients.
Steve Sabel
Senior Account Relationship Manager
The Payroll Factory, Inc.
18 East Lancaster Avenue
Malvern, Pennsylvania 19355
267-907-4179 cell
steve@prfusa.com
www.thepayrollfactory.com
