Your payroll office is correct. As a resident of MD you are not liable for PA state income tax on your W2 compensation. You are however liable for local PA income taxes and PA SUI/SDI.
However, you may claim a credit on your MD tax return for the local PA income taxes you pay, by filing MD Form 502CR with your MD state return.
https://www.marylandtaxes.gov/forms/21_forms/502CR.pdf
**Answers are correct to the best of my ability but do not constitute tax or legal advice.
