We relocated from PA to NC, but I will work 100% remotely for a company branch located in PA.
My tax withholding were adjusted so that $0 goes to PA and appropriate amount goes to NC.
I found conflicting information on the internet. Some articles say that you pay ALL you taxes in state of residence (NC). Some say that you still need to pay tax to PA and then claim a credit on NC to avoid to be double taxed.
However, at present five states do not follow that rule. Those states are New York, Pennsylvania, Delaware, New Jersey and Nebraska. In those states all wages earned from an employer in any of those states are allocated to those states unless by necessity the nonresident’s work must be performed from his or her out-of-state location. Basically, these states will tax a nonresident telecommuter’s wages if the work is performed out-of-state for the convenience of the employee.
What material evidence is needed (if at all) to prove the "necessity" and "convenience"? How do they even verify something like that? All they get is W2 no? Or does the employer sends some additional paperwork to clarify that?
In case, I need to pay taxes in both states and claim a credit in NC. How does that needs to be reflected on the paycheck withholding? Should they still withhold 0$ to PA?