Because the rules are different for federal and non federal government.
I have never seen a US state or smaller jurisdiction be able to tax an entity that does not perform work or reside within its boundaries, so I am curious which one it is so I can look it up.
See this federal law prohibiting states from taxing non residents:
> (a) No State may impose an income tax on any retirement income of an individual who is not a resident or domiciliary of such State (as determined under the laws of such State).
Based on the answers to this question, what I suspect is happening is to morvita’s mom is erroneously having state income taxes withheld for a state she does not live in, which she is then filing a non resident tax return to get a refund.
I have never seen a US state or smaller jurisdiction be able to tax an entity that does not perform work or reside within its boundaries, so I am curious which one it is so I can look it up.
See this federal law prohibiting states from taxing non residents:
https://www.law.cornell.edu/uscode/text/4/114
> (a) No State may impose an income tax on any retirement income of an individual who is not a resident or domiciliary of such State (as determined under the laws of such State).
Based on the answers to this question, what I suspect is happening is to morvita’s mom is erroneously having state income taxes withheld for a state she does not live in, which she is then filing a non resident tax return to get a refund.
https://ttlc.intuit.com/community/state-taxes/discussion/i-r...
However, morvita’s mom should just tell the pension administrator to stop withholding income tax that they will never owe.