I have an employee who lives in NJ, works 98% of the time in NY and is doing a temporary job in Philadelphia. Our company is located in NY. He is having Phili local tax withheld. Does he need PA state taxes withheld or is he considered a non-resident. He has been having NY state taxes withheld because they are greater than NJ and the taxes have been following the work. Any advice? Thank you.

Yes, he needs to have PA state taxes withheld. There will be no offsetting credits on the PA tax liability, so withholding is needed to keep him from getting a nasty surprise next year come tax time.