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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..
In a situation like this it is conceivable that you could be the resident of two states. Filing as a resident in two states should be avoided whenever possible. Thatâs because states where you are a resident have the right to tax ALL your income, no matter where it was earned. If you are a resident of two states you will likely end up paying more in states taxes than if you were a resident of just one, or a resident of one state and a nonresident of another.