Tax Information - State Plan
State Plan temporary disability benefits are considered third party sick pay for both federal income tax and social security (F.I.C.A.).
- Federal Income Tax is not withheld from your benefits unless you request this weekly deduction when applying online or by using a W4S form available on the IRS website www.irs.gov/w4s or from your employer.
- Federal Law requires that FICA contributions be automatically deducted from the taxable portion of your benefits. The employer is liable for the employer's share of FICA.
You must be report a portion of the benefits you received on your federal income tax return. The portion of State Plan benefits paid to you that is considered taxable income is related to your last employer's disability contribution. In January of the year following your receipt of benefits, the amount of your benefits that is taxable will be reported to your employer who will include that amount on your W-2 annual earnings statement. The Division of Temporary Disability Insurance will not send you a W-2 form.
Temporary Disability benefits are not subject to the New Jersey State Income Tax.