It sounds as if you will still need to file a NYS return; however, you will need to subtract the apparent extra income on your NYS return. See below.
New York State taxes most telecommuters who work for New York based companies, even if they live out of state.
The exception is generally those employees who live and work out of state at the employers' convenience, i.e., they require you to live out of state (as opposed to for your convenience).
Please see the memorandum concerning the "New York Tax Treatment of Nonresidents and Part-Year Residents Application of the Convenience of the...".
I take it that your company's HR department believes that you are in Colorado for your convenience, not for your employer's. If you disagree with your company's assessment, you need to take that up with your payroll department.
Please don't change the W-2 entry in TurboTax, because that just attracts the IRS's attention (the IRS gets a copy of your W-2, and the two copies won't match).
Unfortunately, since your company has already sent all the withholdings to New York State, if you are correct that the company made a mistake, you will have to get the money back on your New York return. That is, you will have to find a place on the NY return where you can remove the amount of income erroneously allocated to NYS.
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