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New Jersey governor decides to retain income tax reciprocity agreement with Pennsylvania

On Nov. 22, 2016, New Jersey Gov. Chris Christie announced that he would retain the 1977 Reciprocal Personal Income Tax with Pennsylvania, in light of recently passed legislation in New Jersey that reduces the state’s budget shortfall. In early September, Gov. Christie announced his intent to terminate the agreement effective Jan. 1, 2017, if the legislature could not find alternative ways to reduce health care costs for the state’s public employees.

If the agreement had been terminated, many Pennsylvania residents working in New Jersey would have seen a substantial increase in their personal income tax liability. Ending the agreement would have also negatively impacted many low-income New Jersey residents working in Pennsylvania.