Is Long-Term disability taxable in New Jersey?
Sarah Duran
Published Feb 28, 2026
As @KatyS said, disability payments are not taxable in New Jersey so neither you nor your employer will have a problem with the IRS. Unemployment compensation and temporary disability (including family leave insurance benefits) received from the State of New Jersey or as third-party sick pay are not taxable.
Is short-term disability taxable in New Jersey?
Temporary Disability benefits and Unemployment Insurance benefits are not subject to the New Jersey state income tax.
How do I know if long-term disability is taxable?
If your employer pays your long-term disability premium and they don’t include the amount paid in your gross wages, then your benefits will be taxable. And they are taxable to you.
How Much Does Permanent disability Pay in NJ?
Rates & Statistics
| Temporary Disability Rate | Permanent Partial Disability | |
|---|---|---|
| 2017 | $896 max/$239 min | $896 max/$35 min |
| 2018 | $903 max/$241 min | $903 max/$35 min |
| 2019 | $921 max/$246 min | $921 max/$35 min |
| 2020 | $945 max/$252 min | $945 max/$35 min |
Do you get a W2 for disability in NJ?
The Division of Temporary Disability Insurance will not send you a W-2 form. If you wish to have federal income taxes withheld from your disability benefits, you must attach Form W-4S (Request for Federal Income Tax Withholding From Sick Pay) to your claim.
How are disability benefits taxed in New Jersey?
The portion of the benefit payment that is taxable is that portion attributable to the employer’s disability contribution rate. The employer is also liable for the employer’s share of FICA. Disability benefits are not taxable under the New Jersey state income tax.
Is there temporary disability insurance in New Jersey?
Temporary Disability Insurance is available to most New Jersey workers. workers that are not technically employees (such as properly classified independent contractors). If your employer is covered for Temporary Disability Insurance, they are required to set up payroll contributions for you.
Do you have to pay taxes on social security in New Jersey?
New Jersey disability income and unemployment benefits are not taxed on the state level. However, Social Security disability benefits may be taxable depending on whether or not you received other income in addition to your disability payments, and if you filed joint taxes.
Do you pay taxes on unemployment in New Jersey?
Individuals who collect these benefits will receive a 1099 form directly from the Department of Labor and Workforce Development listing the taxable income and any withholding. Temporary Disability benefits and Unemployment Insurance benefits are not subject to the New Jersey state income tax. June 3, 2019 12:08 PM
