Payroll's amazing response on this issue, in summary:
"Yes you do work in NY, we don't care where you say you are, and we'll fill out box 16 for 100% and any consequences of us doing that are your problem." Of course, I've never stepped foot in NY.
This is not an uncommon situation. The NY tax people put pressure on employers to withhold NY tax and the easy way for the employer is just do it and let the employee deal with the consequences.
I suggest you file for a refund, mail your return, attach an explanation statement. If you don't get the refund, file your PA return claiming a credit for the tax paid to NY.
It is what it is.
