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If you live in Pennsylvania and work in New Jersey, your income is taxed by Pennsylvania and is not subject to tax by New Jersey. If taxes are improperly withheld by an employer in New Jersey, a taxpayer can apply for a refund.erbert M. Paul, a New York tax lawyer, explained how New York handles the matter. If you have a residence in New York and in another state as well, and spend more than 183 days in New York, he said, you are considered a statutory resident and all of your income is subject to New York tax..
People who live in a non-tax state but work in a taxing state, or who work in a non-tax state but live in a taxing state donât escape state income taxes. You will have to pay income taxes to the taxing state you work in if you reside in a non-tax state.