I am a NJ resident. For 2016 I received Third Party Sick Pay from Insurance Company & got Form W2 in which Third Party Sick Pay box is checked in Box 13 and amount of Third Party Sick Pay I received is also reported in box 16 as State wages, tips, etc. I read following on NJ Treasury website :
"Unemployment compensation is not taxable. Do not include these amounts on the New Jersey Income Tax return. Likewise, temporary disability (including family leave insurance benefits) received from the State of New Jersey or as third-party sick pay should not be included on the New Jersey Income Tax return."
So my question is what should I put in box 16 while preparing my tax return for NJ state? Should I put zero dollars or should I report the amount reported in box 16 on W2 form?
Please read this:
Your employer must prepare and sign this form, which you will then mail to NJ with your tax return:
http://nj.gov/treasury/taxation/pdf/other_forms/tgi-ee/2002/022440.pdf
Thanks for the quick reply. My employer or the insurance company making the sick payment needs to sign the form you mentioned? Does this also mean that I need to file paper copy of my NJ return?
Your employer must sign the 2440 form. And, yes you must file your NJ return by mail.
My employer is not sure whether they need to issue NJ-2440 or the Insurance Company should issue it. I got regular W2 from my employer, which is fine. I got second W2 from Insurance Company for Third Party Sick Pay. In this second W2 from Insurance Company, the amount of Third Party Sick Pay is reported in box 16 of W2.
So my questions are:
1. Who should issue NJ-2440? My employer or Insurance Company?
2. If my employer has to issue NJ-2440, should the amount in NJ-2440 exactly match with amount mentioned in box 16 of W2 from Insurance Company?
Thanks in advance.