---
title: "Form NJ-165: Employee's Certificate of Nonresidence in NJ"
description: "Form NJ-165 stops New Jersey tax withholding for Pennsylvania residents who work in New Jersey. Who files it, where it goes, and the reverse form REV-419EX."
url: "https://mcc-solutionsnj.com/bookkeeping/form-nj-165"
---

Tax forms

# Form NJ-165: stopping New Jersey withholding for Pennsylvania residents

If you live in Pennsylvania and work in New Jersey, your wages aren't subject to New Jersey income tax. Form NJ-165 is how you tell your employer to stop withholding it.

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## What Form NJ-165 does

New Jersey and Pennsylvania have a reciprocal agreement: wages a Pennsylvania resident earns in New Jersey aren't subject to New Jersey income tax, and wages a New Jersey resident earns in Pennsylvania aren't subject to Pennsylvania income tax. Form NJ-165, the Employee's Certificate of Nonresidence in New Jersey, is the employee's statement that they live in Pennsylvania, so the employer withholds Pennsylvania tax instead of New Jersey tax.

## Who files it and where it goes

- **Who:** a Pennsylvania resident who works for an employer in New Jersey.
- **Where:** to the employer, not to the State. The employer keeps it with its payroll records.
- **When:** when you start the job, and again if your address changes. If you move to New Jersey, the exemption ends; tell your employer.

## What it doesn't cover

The agreement covers wages only. Self-employment income and other income both states can tax, such as a gain on selling New Jersey property, still goes on a New Jersey nonresident return.

## Already had New Jersey tax withheld?

File a New Jersey nonresident return to get it back, with a signed statement that you're a resident of Pennsylvania. Then give your employer Form NJ-165 so it stops.

## The reverse: New Jersey residents working in Pennsylvania

Give your Pennsylvania employer Form REV-419EX, the Employee's Nonwithholding Application Certificate, so it stops withholding Pennsylvania income tax. If Pennsylvania tax was already withheld, a Pennsylvania return gets it back. Local taxes, such as Philadelphia's wage tax, aren't covered by the state agreement.

## For employers

Keep each NJ-165 on file, set the employee up for Pennsylvania withholding instead of New Jersey, and update it when an employee moves. Our [bookkeeping and payroll support](/bookkeeping/plans) checks this when we onboard your payroll.

Sources: [NJ Division of Taxation, income tax reciprocity](https://www.nj.gov/treasury/taxation/njit25.shtml); [Form NJ-165 (PDF)](https://www.nj.gov/treasury/taxation/pdf/current/nj165.pdf). General information, not tax advice.

Related: [New Jersey reciprocity and multistate workers](/bookkeeping/state-tax-reciprocity-new-jersey) · [New Jersey residents working in New York](/tax-preparation/nj-ny-commuters) · [Tax preparation](/tax-preparation)

## Questions

**Do I send Form NJ-165 to the State of New Jersey?**

No. You give it to your employer, who keeps it on file and stops withholding New Jersey income tax.

**Does Form NJ-165 exempt all my income from New Jersey tax?**

No. The reciprocal agreement covers wages only. Self-employment income and other income both states can tax still go on a New Jersey nonresident return.

**What if New Jersey tax was already taken out?**

File a New Jersey nonresident return with a signed statement that you're a Pennsylvania resident to get it refunded, and give your employer Form NJ-165 so it stops.

**Does this work for New York?**

No. New Jersey's reciprocal agreement is with Pennsylvania only. New Jersey residents who work in New York file a New York nonresident return and claim a credit on their New Jersey return.

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