is severance nj state taxable
NOTE: An individual who receives remuneration in lieu of notice for a period of less than a calendar week may be eligible for partial unemployment benefits for such week. âSeverance pay,â if paid within the context of contractual obligation or by custom, is a taxable fringe benefit under Administrative Code 12:16-4.3. It is subject to state unemployment, temporary disability, workforce development and family leave insurance contributions. However, severance pay is not considered wages earned when calculating unemployment benefits for claimants. âContinuation payâ is also known as sick leave pay. Continuation pay is considered wages and is taxable under Administrative Code 12:16-4.2. It is subject to state unemployment, temporary disability, workforce development and family leave insurance contributions.