You are correct. If you live in New York and work in New York and Pennsylvania, then you would file a resident NY return and a nonresident PA return.
NY will give you credit for tax paid to PA. Pennsylvania’s tax rate is generally lower, so it won’t be 100%.
I don’t understand what you mean by “my W2 for non-resident state indicates on Box 15 State Employer’s State ID is NY.” That sounds like your employer only withheld NY tax and did not split out wages.
You are still required to file PA tax if you worked in PA. You’ll just have to allocate PA income by yourself.
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