Compare taxes and see how much you save moving from New Jersey to Pennsylvania
Pennsylvania's 3.07% flat rate looks unbeatable—until you add Philadelphia's 3.79% local wage tax = 6.86% total. The Philly metro reality: live in Philly, pay 6.86%. Live in NJ suburbs (Cherry Hill, Princeton), pay 5.85-6.37% effective. Live in PA suburbs (King of Prussia, Wayne), pay 3.07-4.5% (varies by municipality). At $100,000 living in Philadelphia: PA total ~$6,860. Living in Princeton NJ: ~$5,850. Philadelphia is WORSE than wealthy NJ suburbs! But property taxes flip it: NJ 2.42% vs PA 1.58%. A $500K home in NJ costs $12,100/year; same home in PA suburbs ~$7,900. Choose NJ if: you're in wealthy suburbs where income tax is moderate and property values stable. Choose PA suburbs if: you want the NYC/Philly job market with lower total burden. Avoid Philadelphia if: you're optimizing for taxes (6.86% is brutal).
Top Rate ($1M+)
No local income tax
Flat Tax
Plus Philly 3.79% local tax
At $100,000 (location dependent) income:
That is $167-667/month back in your pocket!
| Income | NJ Tax | PA Tax | Savings | 10-Year |
|---|---|---|---|---|
| $75,000 (living in Philadelphia) | ~$4,388 (NJ suburban rate) | ~$5,145 (3.07% + 3.79%) | NJ suburbs save $757 | $7,570 |
| $100,000 (Philly vs Princeton) | ~$5,850 (Princeton area) | ~$6,860 (Philadelphia) | NJ saves $1,010 | $10,100 |
| $100,000 (PA suburbs vs NJ) | ~$5,850 (NJ suburban) | ~$3,570 (King of Prussia ~0.5% local) | PA suburbs save $2,280 | $22,800 |
| $100K + $500K home (totals) | ~$5,850 income + $12,100 property | ~$3,570 income + $7,900 property | PA suburbs save $6,480 | $64,800 |
| $200,000 (Philadelphia) | ~$13,700 (NJ suburban) | ~$13,720 (6.86% Philly) | Nearly identical | ~$0 |
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Moving from New Jersey to Pennsylvania? Multi-state returns are tricky—partial-year residency, different deadlines, avoiding double taxation. Get matched with a CPA who specializes in state moves. Virtual meetings, fixed pricing.
Get Matched With a CPA →Yes—IF you avoid Philadelphia city. PA's 3.07% state rate + low local tax (0.5-1% in suburbs like King of Prussia) beats NJ's 5.85%+ effective rate. But Philadelphia's 3.79% local wage tax brings the city total to 6.86%, which is HIGHER than wealthy NJ suburbs. The PA advantage is in the suburbs, not the city.
Philadelphia levies 3.79% on all wages earned by residents (regardless of where they work) AND on all wages earned in Philadelphia (regardless of where you live). If you live in NJ but work in Philly, you pay the non-resident rate (3.44%). This stacks with PA's 3.07% state tax. Philly residents pay 6.86% total before federal taxes.
Montgomery County suburbs (King of Prussia, Conshohocken, Wayne) have local rates around 0.5-1.0%, bringing totals to 3.5-4.1%. Chester County (West Chester, Malvern) is similar. Delaware County varies more—some townships near 2%. Bucks County averages 1.0-1.5% local. Always check your specific municipality before moving.
It depends on the salary premium. NJ residents working in Philly pay Philly's 3.44% non-resident wage tax (credit against NJ tax). If your NJ income tax rate exceeds 3.44%, you'll owe NJ the difference. At $100K income in Cherry Hill NJ: ~$5,850 total. In PA suburbs near Philly: ~$3,500-4,100 total. PA suburbs usually win.
No—PA exempts all retirement income from state tax, including 401(k), IRA, and pension distributions. Social Security is also exempt. This is a major advantage over NJ, which taxes retirement income above modest thresholds. For retirees, PA is dramatically more favorable regardless of the income tax rate comparison.