Are NJ taxes higher than PA?
State sales tax for Pennsylvania is at 6 percent, compared to 7 percent for New Jersey. Naturally, there's more to selecting the perfect home than simply the tax rates.
You will even find that major cities like Pittsburgh and Philadelphia offer a significantly lower cost of living compared to other East Coast metropolitan areas. In fact, Jersey City is 45% more expensive than Philadelphia and the median home cost is 216% more in New Jersey!
Comparing the total local and state per capita tax burden, Pennsylvania ranked 19th, below New York (No. 1), New Jersey, Maryland, and Delaware. The combined state personal income tax and local earned income tax led to Pennsylvania having the 18th highest income tax burden.
As a PA resident working in one of the reciprocal agreement states (Indiana, Maryland, New Jersey, Ohio, Virginia, West Virginia) your compensation is taxable to PA, not the reciprocal state.
New Jersey has the highest average property tax rate in the U.S. at 2.23 percent of a home's assessed value in 2021, according to the Tax Foundation.
New Jersey actually ranks higher than Pennsylvania, where Chester County's $447,000 home value put the Keystone State at 28th on that list and Bergen County's $607,170 placing the Garden State at 17th highest home price.
He said New Jersey's sales tax rate in 2020 is 6.625%. Pennsylvania's sales tax rate is 6%. With local sales tax included, the total is between 6% and 8%, he said.
In New Jersey, there's a strong emphasis on local control of public services, particularly education. Those education costs are amongst the highest in the nation, and they're mostly paid through property taxes.
Why are NJ property taxes so incredibly high? The Citizens of New Jersey have decided that they want very, very local control of their townships and villages. This means that every town and borough has a host of well-paid executives running the town as well as over-staffing in police and fire services.
Still, thanks to the folks at WalletHub you can have an idea of the difference. The median Pennsylvania property tax (statewide) is approximately $2,852. The median New Jersey property tax (statewide) is approximately $8,362. Unlike New Jersey, retirement income is not taxed in Pennsylvania.
Why do I owe NJ taxes if I live in PA?
You likely do not, however NJ is probably showing on one of your income forms indicating you worked in NJ, taxes were withheld, and you have not removed those wages from NJ taxation. NJ and PA have a tax reciprocity agreement. That agreement states only the resident state will tax your wages/salary.
The state income tax rates range from 1.4% to 10.75%, and the sales tax rate is 6.625%. New Jersey offers tax deductions and credits to reduce your tax liability, including deductions for medical, alimony, and self-employed health insurance expenses.
Pennsylvania has a flat individual income tax rate of 3.07 percent, but some municipalities levy local income taxes. Philadelphia and Chester, for example, levy the state's highest local income tax rate of 3.75 percent.
As of Apr 13, 2024, the average hourly pay for a 150K in New Jersey is $17.56 an hour. While ZipRecruiter is seeing salaries as high as $22.21 and as low as $11.23, the majority of 150K salaries currently range between $13.17 (25th percentile) to $18.32 (75th percentile) in New Jersey.
Unsurprisingly, the states with no state income taxes at all ended up scoring pretty highly. Those eight states are Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming.
If you make $100,000 a year living in the region of New Jersey, USA, you will be taxed $25,917. That means that your net pay will be $74,083 per year, or $6,174 per month.
In a survey of graduation rates, U.S, News found that Pennsylvania had a mean graduation rate of 95.2 percent at high schools in the top quadrant and 86.9 percent in the lower three quadrants. In New Jersey, the mean graduation rate was 97 percent in the top 25 percent of high schools and 89.4 percent in the rest.
NEW JERSEY BESTS PENNSYLVANIA
Pennsylvania came in far behind in the ranking with only 2 schools among the top 100. New Jersey's performance was especially impressive given that it accounted for half of the top ten schools and in that elite list, Pennsylvania had none.
The Pros of Living in Pennsylvania
Overall, the state is considered more affordable than 30 other states. Housing can be significantly cheaper than in neighboring states. Taxes are low and easy to calculate too. The state income tax rate is a flat 3.07 percent for everyone, with a modest 6% sales tax.
Compensation paid to Pennsylvania residents employed in New Jersey is not subject to New Jersey Income Tax under the terms of the Reciprocal Personal Income Tax Agreement between the states. Similarly, New Jersey residents are not subject to Pennsylvania income tax either.
Are property taxes higher in New Jersey?
According to personal finance website WalletHub, New Jersey has the highest real estate tax rate in the nation. With some of the highest median home values in the country, this makes New Jersey the most expensive state for property taxes.
- Florida. #1 in Low Tax Burden. #10 in Best States Overall. ...
- Tennessee. #2 in Low Tax Burden. #24 in Best States Overall. ...
- Alaska. #3 in Low Tax Burden. ...
- South Dakota. #4 in Low Tax Burden. ...
- New Hampshire. #5 in Low Tax Burden. ...
- Missouri. #6 in Low Tax Burden. ...
- Georgia. #7 in Low Tax Burden. ...
- Arizona. #8 in Low Tax Burden.
The cost of living in New Jersey is 11% higher than the national average. Housing is 30% higher than the national average, while utilities are 12% higher. When it comes to basic necessities such as food and clothing, groceries are around 5% higher than in the rest of the country, while clothing costs 5% higher.
The answer is that New York imposes a higher effective tax rate. There are two reasons. First, New York's marginal rates are higher for incomes up to about $500,000, especially for incomes lower than about $150,000.
If you are thinking of moving from New Jersey to Florida, consider the tax differences. In Florida there is no income tax (compared to New Jersey's income tax rates which can get as high as 10.75%. Neither New Jersey nor Florida charges an inheritance or estate tax as long as certain conditions are met.
