Question

I work as a consultant on a1099 tax basis in Philadelphia, but, live in NJ. Do I pay the qtrly 2016 estimated tax to the City of Philadelphia or State of NJ?

Forum|Forum|7 years ago
June 1, 2019
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Employee

The PA/NJ tax reciprocity applies only to employee compensation that is subject to withholding, and it does not apply to city or local taxes. Therefore your 1099-MISC earnings will be subject to PA state income tax, as well as any Philadelphia city tax. Therefore you should make your estimated tax payments to PA and if necessary to Philadelphia.

Your 1099 income will also be taxable by your home state of NJ, but you'll be able to take a credit on your NJ return for taxes paid to PA.

References:

https://revenue-pa.custhelp.com/app/answers/detail/a_id/851/kw/PA%2FNJ%20reciprocity

http://www.state.nj.us/treasury/taxation/njit25.shtml

**Answers are correct to the best of my ability but do not constitute tax or legal advice.