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@Colmatt wrote:

...He put MA (parent's home) as mailing address for new CT company because he didn't know where he'd settle and thus they withheld MA...

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Sounds like a telecommuter we have here.  I wouldn't buy this story and would ask for more info.

Except for those couple states that tax NR who do not telecommute for the convenience of the employer, the rules are relatively straight forward.  Compensation is sourced to the state where services are performed - where the individual settles is irrelevant.

• Even if the client didn't know where he would reside ultimately, there should be no question where services were being performed.  The client should have reported to payroll where services were being rendered and had taxes withheld to that jurisdiction;
• If your client was in-between moves and he's from a domicile state, tax residency by domicile does not terminate until it is established elsewhere; and
• Depending on the type of activities conducted and the role of the individual, this could also create corporate tax exposure.