That's the key: You have to keep meticulous records to show where you actually worked on any given day. I was in a similar situation, and over the years I learned that it was worth the time to break the hours down if you worked at least 30% of your time in New Jersey instead of in your New York office.
What’s different now? You don’t work in a state, you don’t benefit from their laws or the protection (physical and legal) that they give people working there, then you don’t have to pay.
The difference in the NH-MA case is that NH doesn't have an income tax, so there's no tax return to file outside of MA to document how much of your income is "non-MA" income.
Your conclusion is upside down if you live in NY and work in CT. The existence of a tax credit is irrelevant to whether a jurisdiction can tax you.
My conclusion is the same, but the numbers are different. In my example, the person who lives in NY and works in CT would pay $4,000 to CT, report a $5,000 tax obligation to NY, but then only pay NY the difference between the tax obligation and the amount paid to another jurisdiction.
Taxation is **NOT** based just on where the income was generated. Try earning interest income or dividends (or a salary for that matter) overseas as a US citizen or a Permanent Resident - you will pay tax to the US on your worldwide income.
You will pay the tax to the U.S. on your worldwide income, but you will also be credited for taxes paid to other jurisdictions. I've been in that situation, too. The standard approach was always the same: Prepare the tax returns for the various places where you WORK first -- to figure out how much you owe to those jurisdictions. Then prepare the tax return for the place where you LIVE last -- so you will know how much you will have in credits from other jurisdictions to offset your "home" tax liability.
My point is that you will pay taxes both where you live and where you work, if they are two different jurisdictions. Also, anyone who has gone through this process understands that you are going to pay tax at the rate of the higher tax jurisdiction.
What REALLY ticks me off is that if you earn only a small percentage of your income in a high tax state, they will generally make you calculate ALL income wherever earned, then calculate their tax, then make you pay X% of the total tax to them. What this does is to push you into the highest possible tax bracket in their state.