N.J. Stat. § 54:8A-101
From and after January 1, 1972, every employer in this State of a taxpayer subject to tax in respect of wages, salaries or commissions derived from sources within this State shall deduct and withhold upon the same for each payroll period an amount computed in such manner as to result, as far as practicable, in withholding during each calendar year a sum substantially equivalent to the amount of tax reasonably estimated to be due under this act. Methods for determining the amount to be withheld shall be prescribed by regulation, as shall procedures and requirements for the furnishing by the employer of written statements showing the total compensation, the amount withheld and other specified information.
The director may enter into agreements with the tax departments of other states (which require income tax to be withheld from the payment of wages and salaries) so as to govern the amounts to be withheld from the wages and salaries of residents of such states under provisions of this act. Such agreements may provide for recognition of anticipated tax credits in determining the amounts to be withheld and, under regulations prescribed by the director, may relieve employers in this State from withholding income tax on wages and salaries paid to nonresident employees. The agreements authorized by this subsection are subject to the condition that the tax department of such other states grant similar treatment to residents of this State.
N.J.S. § 54:8A-101