If your checks are cut from an MS office they may be doing that, illegally I assume, to cut down on their own paperwork and save you money in the process. Had an inverse situation: My brother lived in NYC, worked at an airport in NJ (lower income taxes). His company also had an NYC airport office and they cut his checks out of there, so NYC income tax. He paid the same he would have but only filed one state return. NYC got undeserved money and NJ got stiffed.