ErnieS0
Expert Alumni

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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. Do not include these amounts on your New Jersey return.

 

Refer to Income Taxability

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