Gov. Chris Christie at a Trenton area event in June.
Credit: State of NJ
New Jersey Gov. Chris Christie announced Tuesday that his administration is reversing its earlier decision to end a 40-year-old reciprocal income tax agreement between Pennsylvania and the Garden State.
Keeping the reciprocal income tax agreement will impact roughly 50,000 Bucks County residents employed in New Jersey. The news will impact thousands more outside of Bucks County who commute across the Delaware River for work.
Under the agreement that was set in place in 1977, Pennsylvania residents who work in New Jersey only file a tax return with Harrisburg and not one with Trenton; the same would go for Garden State residents who work in Pennsylvania. The agreement works out for Pennsylvania residents who pay a lower flat income tax than those who live in New Jersey and pay a progressive income tax.
The reciprocal income tax agreement was initially cancelled in September by Christie and drew outrage from many Pennsylvania state lawmakers. New Jersey State Senate President Stephen Sweeney, a Democrat, even voiced his displeasure with the decision and said it would impact working families.
The Republican governor’s decision came after he announced reforms have saved over millions and will help fill a $250 million 2017 budget deficit.
“By addressing a potential $250 million budget deficit from growing healthcare costs, we are now able to save an income tax reciprocity agreement with Pennsylvania that protects tens of thousands of hard working New Jerseyans from having to pay more income taxes,” Christie, a Republican, said in a statement.
State Rep. Steve Santarsiero, a Democrat from Lower Makefield, held a press conference earlier this year after delivering a petition with the signatures of 3,516 Pennsylvanians who didn’t support ending the agreement to Christie’s office. Republican State Rep. Frank Farry, Democratic State Rep. Tina Davis and Republican Congressman-elect Brian Fitzpatrick have all spoken out against Christie ending the agreement.
