double taxation on capital gains

Forum|Forum|2 years ago
February 25, 2024
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I live in NJ and work virtually most of the time.. my office is in PA and when I go there I am Taxed PA for wages I have capital gains from sale of cryptocurrency Do I need to pay Gains in both NJ and PA

rjs

Employee

No. Capital gains are considered income from the state that you live in. You pay tax on the capital gains only to the state that you live in. Working in another state does not make your capital gains taxable by that state.

Are you an employee of a company in Pennsylvania (you get a W-2), or are you an independent contractor (you get a 1099-NEC or no tax form)? New Jersey and Pennsylvania have a reciprocal agreement for W-2 income. If you are an employee you should not be paying Pennsylvania state tax or even filing a Pennsylvania tax return. There should be no Pennsylvania state tax withheld from your wages. Under the reciprocal agreement you pay tax only to New Jersey on all of your W-2 income, even if some of it is earned in Pennsylvania. However, you would still have to pay city tax if you work in Philadelphia or another city that has city income tax. Go to the following link for more information.

PA/NJ Reciprocal Income Tax Agreement