Unemployment Insurance Taxes (FUTA/SUTA), Family Leave and Temporary Disability Insurance (FLI/TDI) Taxes: New Jersey
Federal law and guidance on this subject should be reviewed together with this section.
Author: Vicki M. Lambert, The Payroll Advisor
- New Jersey uses the ABC test to determine if a worker is an independent contractor or an employee for unemployment insurance coverage purposes. All work performed by an individual for compensation is deemed to be employment, unless certain conditions are met. See ABC Test.
- Taxable wages for state unemployment insurance (SUI) purposes in New Jersey includes every form of compensation paid to employees either directly or indirectly, the cash value of all compensation in any form other than cash and payments made in kind for personal services, such as employer-provided meals and board and lodging received in addition to or in lieu of cash wages. Special rules apply to sick leave, disability and family leave insurance benefits. See SUI Taxable Wages.
- Unemployment insurance contribution rates in New Jersey are assigned on a fiscal year basis (i.e., July 1 to June 30). All new employers (except successors) are assigned new employer rates for the first three calendar years, after which a calculated rate is assigned based on unemployment experience. See SUI Taxable Wage Base; Contribution Rates; Experience Rating Method.
- New Jersey follows the federal SUTA Dumping Prevention Act. See SUTA Dumping.
- New Jersey employers are permitted to make voluntary contributions to lower their unemployment contribution rate for the current year under certain conditions. See Voluntary Contributions.
- In New Jersey, two or more nonprofit organizations that are exempt under § 501(c)(3) of the IRC and that are required to make reimbursements of unemployment benefit costs in lieu of making contributions may apply to establish a group account for the purpose of sharing the cost of benefits paid. See Joint or Combined Accounts.
- All employers are required to file quarterly unemployment insurance reports no later than 30 days after the end of each quarter. Penalties are imposed for noncompliance. See Quarterly Reporting Requirements.
- An employer's UI account will not be relieved of charges for erronous benefit payments under certain circumstances. See Benefit Overpayments.
- All New Jersey employers must file quarterly multiple worksite reports on Form BLS 3020. The totals on the report must match the corresponding totals on an employer's quarterly tax report, Form NJ-927. See Multiple Worksite Reporting.
- All employers of one or more employees on a permanent, temporary or part-time basis, even if not subject to SUI, must maintain and keep certain records for the current year and the four preceding calendar years. See SUI Recordkeeping Requirements.
- New Jersey law provides up to six weeks of Family Leave Insurance benefits. The law applies to all private and government employers that are subject to SUI. The FLI program is financed by employee payroll deductions. Employers do not contribute to the plan. An employer can elect to provide employees with FLI benefits under a private plan that has been approved by the Division of Temporary Disability Insurance. Quarterly reporting is required. See Family Leave Insurance.
- New Jersey employees who are temporarily disabled by a nonwork-related injury or illness may receive benefits through the State Plan or an approved private plan. All covered employers and covered employees must contribute to the State Plan in much the same way that they contribute to the SUI fund. Private plans are an alternative option to the State Plan. See Disability Insurance.