STATE OF NEW JERSEY
222nd LEGISLATURE
PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION
Sponsored by:
Senator HOLLY T. SCHEPISI
District 39 (Bergen)
SYNOPSIS
Urges Congress to exempt unemployment insurance and certain leave benefits from federal taxation.
CURRENT VERSION OF TEXT
Introduced Pending Technical Review by Legislative Counsel.
A Senate Resolution urging Congress to exempt unemployment insurance and certain leave benefits from federal taxation.
Whereas, While the State of New Jersey does not tax unemployment insurance benefits, family temporary disability leave benefits, or temporary disability leave benefits, these benefits are taxed by the federal government; and
Whereas, Individuals who are unemployed are often surviving on a limited budget and struggling to find employment, and taxing a benefit intended to keep these individuals afloat only exacerbates financial struggles; and
Whereas, With respect to family temporary disability leave benefits, these benefits are entirely funded by employees through a payroll deduction, and are intended to cover absences from work when an individual is caring for a family member who is ill or a newborn; and
Whereas, An individual receiving temporary disability leave benefits for an illness or injury that prevents the individual from working is in a vulnerable position with uncertain future income sources; and
Whereas, The United States government should not place additional burdens on individuals with limited income due to unemployment, injury, illness, or care of a newborn by requiring these individuals who are temporarily out of work to pay taxes on earned benefits; and
Whereas, It is in the interest of all residents in the State to receive a federal tax exemption for unemployment insurance, family temporary disability leave, and temporary disability leave benefits; now, therefore,
Be It Resolved by the Senate of the State of New Jersey:
1. This House urges Congress to exempt from taxation unemployment insurance benefits, family temporary disability leave benefits, and temporary disability leave benefits.
2. Copies of this resolution, as filed with the Secretary of State, shall be transmitted by the Secretary of the Senate to the Governor, President and Vice President of the United States, the Majority and Minority Leader of the United States Senate, the Speaker and Minority Leader of the United States House of Representatives, and to every member of Congress elected from this State.
STATEMENT
This Senate Resolution urges Congress to exempt from taxation unemployment insurance benefits, family temporary disability leave benefits, and temporary disability leave benefits. While the State of New Jersey does not tax these benefits, the federal government does tax them. Individuals who are on leave from work due to illness or injury or due to caring for a family member who is injured or ill are not in a position to pay taxes on limited incomes. Likewise, individuals who are out of work due to unemployment are already struggling to make ends meet, and should not be further burdened with the taxation of their unemployment benefits.