Why is my NY tax so high when I worked in PA and paid tax in PA but lived in NY and earned income in NY? It is counting the PA income in both states?

Yes, NY is your resident state so it taxes all income and gives a credit for the double taxed income.

NY calculates the tax on the total income and then calculates the tax credit for tax paid to PA.

You get credit for the lower state tax on the lowest taxable amount.

• Each state calculates taxable income differently. 
• Each state has its own tax rate/ system.
• You get the lowest of both categories as a tax credit.