How states handle Difficulty of Care

Hello everyone!

I received a W2 for the Difficulty of Care income I receive to care for my adult son with autism. I was told I was exempt from both federal and state taxes so no taxes were taken out for state or federal. In box 1 of the w2, Federal wages were reported as 0, however, state wages in box 16 showed the total amount of income I made and I am now owing Pennsylvania $719. Are Difficulty of Care payments truly state exempt? Is it a state by state decision? I don't know how to proceed. Thank you!