This is PA's rule for non-resident teleworkers after the Covid restriction was lifted on June 30, 2021:
A non-resident employee who is required to telework full-time from home in another state should treat his compensation as non-Pennsylvania source income even if his employer is located in Pennsylvania. In those situations, the employer is not required to withhold on the employee’s compensation.
https://www.revenue.pa.gov/COVID19/Telework/Pages/default.aspx#:~:text=A%20non%2Dresident%20employee....
This means that if you're a NY resident with a PA employer, and you're working remotely from a NY location because your employer requires you to do so, and you never physically work within PA, then your income from that work is not taxable by PA. The key word is "required."
Such an employee would have to file a non-resident PA tax return only if his employer withheld PA taxes. On that return, the employee would allocate zero income to PA and thus would receive a full refund of his withheld PA taxes. In that situation the employee would NOT claim an other-state credit on his NY return because he would de facto be paying no taxes to PA.
**Answers are correct to the best of my ability but do not constitute tax or legal advice.
