dvhighdrive88

This appears to be for real and will have huge implications for guys who live in PA and work out of EWR for UAL. It's from Paychex one of the biggest firms of it's type in the business so I can't imagine them sending this out unless there was something to it.

This could be really big deal for the guys in PA.

New Jersey Slated to End State Tax Withholding Agreement with Pennsylvania

Dear Valued Client:
We’re giving you a heads up about a potential change to New Jersey (NJ) and Pennsylvania (PA) state income tax withholding.
NJ Governor Chris Christie announced that he is ending the nearly 40-year-old reciprocal agreement between New Jersey and Pennsylvania that has allowed taxpayers to pay income tax only in the state where they live; they didn’t need to pay income tax in the state where they worked. Currently, the change is slated to take effect January 1, 2017; however, Governor Christie stated that he would consider revising this if NJ lawmakers take action to reduce health-care costs.
New Jersey has different tax rates for individuals and married couples filing joint returns based on earnings. The tax percentages range from 1.4 percent for incomes of $20,000 or less to 8.97 percent for incomes greater than $500,000. Pennsylvania's rate is flat at 3.07 percent, regardless of income.
How Will This Affect Your Employees?
If you have employees that live in PA, but work in NJ, they are currently only required to pay PA income tax. Without the NJ/PA reciprocal agreement, these employees will need to pay both PA and NJ income tax.
If you have employees that live in NJ, but work in PA, they are currently only required to pay NJ income tax. Without the NJ/PA reciprocal agreement, these employees will need to pay both NJ and PA income tax.
Affected employees will also need to file two state personal income tax returns.
How Will This Affect You, the Employer?
If you have any employees in these situations, you need to identify them and let Paychex know the other state that we need to set up for each affected employee.
You’ll need to remit state withholding tax to both states following the states’ tax deposit rules. If you don’t already have state IDs in both states, you’ll need to apply for an account in the other state.
If you are a Taxpay® client, you need to notify Paychex of the new state withholding ID and provide the necessary documentation.
Sincerely,
The Specialists at Paychex

svergin

I'm not an attorney and don't play one on TV but I'm pretty sure they aren't going to be able to do that since you don't earn your income in that state. In theory every single state that you fly to could claim that you are earning money there and force you to pay income taxes to that state.

Also there is federal law that limits how states can tax non-residents, based on how that income is sourced. So just because you start and end a trip in EWR doesn't mean you are earning all that income in NJ. Can you imagine having to pay NJ state taxes every time you flew into EWR if you were not based there?

Grumble

Taxation without representation. Good luck with that.

Hilltopper89

There is absolutely no way someone...anyone...will be required to pay state income taxes in 2 states.

cadetdrivr

49 U.S. Code § 40116 - State taxation

https://www.law.cornell.edu/uscode/text/49/40116

Note section (f).

Boeing Aviator

EWR CPO believes this will not effect pilots. Since most of our time is way from Newark. Just like pilots who commute from countless states don't pay NJ state income tax only their resident state tax.

jsled

ding ding ding. Cadetdrivr is the winner. Railroad and Airline workers will not be affected. We pay taxes in our state of residence.

jsled

Not true. If you are not an airline/railroad worker, you can be required to file multiple state tax returns. Especially when you live in one state and work in another. I've done it! My neighbor filed in 3 states last year...his home state, and 2 others where he was assigned temporary duty. It's a pain in the arse, but required. We don't know how good we have it!

trip

CA has been trying to tax commuting crews based there forever. It's on you to prove you don't live in their state and that more then 50% of your flying is out of the state.

svergin

Not according to US Code Title 49 40116

Compensation paid by an air carrier to an employee ... in order to perform services on behalf of the employee’s airline union shall be subject to the income tax laws of only the following:

-The State or political subdivision of the State that is the residence of the employee.

-The State or political subdivision of the State in which the employee’s scheduled flight time would have been more than 50 percent of the employee’s total scheduled flight time for the calendar year had the employee been engaged full time in the performance of regularly assigned duties on the carrier’s aircraft.