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.
Comments
The US does this on the country level (US citizens have to declare and are taxed on income even if they don't live in the US), so why not?
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:
https://www.law.cornell.edu/uscode/text/4/114
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.