I live in Pennsylvania. I work full time 100% remotely for a company that is located in Connecticut. On my first paycheck I was surprised to find that I was having state income tax withheld by both CT and PA. Something doesn't seem right about this, so I wanted to ask if this situation is correct. Will I really be getting double taxed just for working remotely? Will I get a refund when I file taxes next year?
Did some googling, and this appears to be a unique difficulty of Connecticut that's hosing you. Typically, you would only be charged in the State where the work was actually performed-- IE, Pennsylvania, since that's where you were physically typing.
Unfortunately, Connecticut Law as of 01/01/2019 states:
Connecticut teleworker implications
Effective January 1, 2019, nonresident Connecticut income tax is imposed on all wages paid to employees working outside of state if (1) the state from which they perform those services is within Delaware, Nebraska, New York or Pennsylvania and (2) the work is performed outside of Connecticut for other than a bona fide reason of the employer.
My interpretation of this (which you should absolutely check with a lawyer about if you want to take action) is as follows:
If your employer did not give you the opportunity to work in Connecticut, you should not be paying taxes. Potential pitfall-- "given the opportunity to work in Connecticut" could mean a lot of different things. If they had an office and said, "would you be willing to relocate?" and you said "no," that might still count as giving you the opportunity to relocate. If they have an office that is a 3 hour drive from your home, they might claim that this is a reasonable distance to commute, etc.
If your employer did or does have an office in Connecticut close enough that you are able and willing to commute into it, you can avoid paying Pennsylvania income taxes by commuting to Connecticut. You would still pay Pennsylvania resident taxes.
Disclaimer: I'm not a lawyer, and all of this has been gleaned from a quick Google search or two. I am a fallible human, and there's every chance that I am interpreting this information incorrectly.