Third Party Sick pay in New Jersey

I received disability pay for all of 2024. My W-2 shows "3rd Party Sick Pay" checked in Box 13. Box 16 shows the full amount of wages as is shown in Box 1. I have read that 3rd party sick pay is non-taxable income in the state of NJ. So, when I filed my return I filed it as non-taxable wages. My return was adjusted by the state and I obviously received a much smaller refund. There was no explanation included. Is this because the 3rd party sick pay (disability pay) policy premiums were provided for by my employer?

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