Courtesy withholding is an optional benefit where employers collect local income tax for employees who live in another city. Through courtesy withholding, employees don't need to pay local taxes separately, as the employer deducts these amounts and pays them on the employee's behalf.
It is probably not called Courtesy Withholding when you work and live in another state, but it is often done. You can request that your employer withhold from either state. Most companies agree to withhold in either state but you will need to check with HR to make the change.
Because of various state agreements, you may also be required to file a state tax return where your employer is located or any state where you have a source of income.
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