W-2 with PA and NY

[pagantom]

Hello. I've been working from home in PA for as long as I've been with my company. the company has offices in NY and PA. Around July 2020, state taxes for PA stopped being withheld and state taxes for NY started to be withheld. My employer says this happened because they went to a new payroll system and used an NY office as my place of work, even though I have never worked in that office. they never bothered to tell me about this change until I asked about it. My W-2 Box 16 value for NY is equal to the Box 1 value. The Box 16 value for PA is equal to what I had earned up to the point that they stopped withholding PA state taxes. 

I understand that this means I have to file a non-resident return in NY too. The Box 16 NY and Box 1 values are both $22, 735. However, NY taxes were only withheld on the compensation I earned after taxes started to be withheld for NY. This means the amount they withheld for NY ($397) is far less that what should have been withheld for the compensation listed in Box 16 for NY. 

Is my 2020 W-2 incorrect?

If it incorrect, can this be corrected now?

what if my employer says my W-2 is correct?

if it is correct, do I adjust the Line 1 "New York State amount" on my NY return from from $22,735 to $7,069?  $7,069 is what I earned after NY taxes started to be withheld

[AmyC]

1. No, NY should not be equal to box 1, PA should since that is resident state.

2. They might correct but doubtful.

3. As long as you have correspondence explaining your assignment to NY office, you can show that you were working for the PA office and thus not all NY income.

4. Yes, you want to adjust the NY income to the correct amount. NY will probably send you a letter one day. Be ready to respond with your PA office location moved to NY location, all remotely. Have your paperwork ready and with your tax file for when the day comes.

PA will give you a credit for the tax paid to NY so you are not double taxed on the money. Prepare the NY return first.