NY resident working in PA

Yes, it includes taxes paid to other state and local governments.   TurboTax will calculate the credit for you.   Prepare the PA nonresident return first, before you prepare your NY resident state return, that way TurboTax will know the amount of taxes paid to PA.  

 

How do I file a nonresident tax return?  

 

You are entitled to claim this nonrefundable credit for the tax year if:

 

• you were a full-year or part-year resident of New York State, or a New York State-resident estate or trust, or a part-year resident trust; and
• you had income sourced to and taxed by another state, a local government within another state, the District of Columbia, or a Canadian province (this income generally includes wages and business income, and typically excludes interest, dividends, gambling winnings, and lottery winnings).

If your New York adjusted gross income includes any income from an S corporation that’s sourced to and taxed by another jurisdiction and you meet the requirements of the previous two bullets, you can claim this credit.

 

See New York state Resident Credit

In the past, turbo tax has not included the local tax that was withheld. I’ve had to manually override the tax paid to be the total of the state and local. Am I doing that correctly? 

Yes.  You are including taxes paid to other jurisdictions om the same income that NY is taxing.

 

@Rkinal