Ah ha. Your contention that the payments you received ". . . were not regular wages . . ." appears to be incorrect. You received third-party income "in lieu of" your regular wages and which were therefore taxable by the state. Since your employer did not include the amounts received in their W-2, and since the third-party issued a separate W-2, your payments are deemed to be "in lieu of" your regular wages and are therefore taxable by the state. The fact that PA income tax withholding may (or may not) have been deducted on either your employer's, or the third-party's, W-2 doesn't matter.
