The answers provided by Critter and TomD8 are basically & usually correct.
But PA has a special rule on out-of-state telecommuters. So, don't be surprised if your employer says he can't change it. If you work outside the state as a job requirement, you are only subject to PA State income tax on the days you work in PA. But if you work outside PA for your own convenience, you are subject to PA State & local income (Lower Merion TWS) tax on all your PA income. New York, Nebraska, Delaware and New Jersey have the same rule. For guidance see: http://www.journalofaccountancy.com/issues/2009/jun/20091371.html
If your are subject to PA taxes, you still have to file the income on your MD return, but MD will give you a credit for what you pay PA
