NJ-2440: Statement in Support of Exclusion for Amounts Received Under Accident and Health Insurance Plan For Personal Injuries or Sickness (Revision 2022-06)
New Jersey · NJ Division of Taxation · Used for tax years 2025
Form NJ-2440 supports an exclusion from New Jersey taxable gross income for amounts an employee receives under an accident or health insurance plan for personal injuries or sickness. It records periods of sickness, allowable sick days, daily pay rates, and total sick pay, and inc
Who files this form
NJ-2440 supports an exclusion from New Jersey taxable gross income for qualifying payments received by an employee through an accident or health insurance plan for personal injuries or sickness.
To qualify, payments must meet all three conditions:
- They compensate for wages lost because the employee was absent due to injury or sickness.
- They are required under an enforceable contractual obligation in the plan, rather than left largely to the employer's discretion.
- They are not ordinary sick leave wage payments made regardless of the reason for the absence.
The printed regulation requires taxpayers claiming an exclusion for qualifying State Plan disability benefits, approved private-plan disability benefits, or insurance-company payments described in paragraph (f) to file a claim form with their annual New Jersey Gross Income Tax Return.
What you'll need
The form asks for:
- The tax year, employee's name and Social Security number, and employer's name and identification number.
- The start and end dates of each period of sickness.
- The number of paid days, the initial period to subtract, allowable sick days, daily rate of pay, and sick pay amount.
- Total sick pay for the year.
- An authorized employer signature, the signer's title, and the date.
The employer must certify that the listed payments meet all three criteria in N.J.A.C. 18:35-2.3.
How to file
Enter the employee and employer details and list each period of sickness. For each period, subtract the initial period from the paid days, then multiply the allowable sick days by the daily rate of pay. Enter the total sick pay for the year.
Have an authorized employer representative sign and date the certification and provide their title.
The printed regulation says to file the required exclusion claim form with the annual New Jersey Gross Income Tax Return. It does not provide a mailing address or e-filing instructions.
Common mistakes
- Excluding discretionary payments. The form states that payments left largely to the employer's discretion, such as payments during an initial period, are taxable as wages and salaries.
- Treating ordinary paid sick leave as qualifying insurance benefits. Payments made regardless of the reason for the absence do not qualify for the exclusion.
- Assuming excluded payments never require withholding. The form says withholding is required even on qualifying payments unless one of its listed exceptions applies.
Questions people ask
Can payments qualify if only my employer pays for the coverage?
Yes. The exclusion can apply when only the employer pays the insurance premiums, or when the employer provides a self-insured plan with no employee premiums, if the payments meet the requirements.
Are New Jersey State Plan temporary disability benefits excluded?
Yes. Required temporary disability benefit payments under the State Plan are excluded from taxable gross income and are not subject to withholding.
Are the first seven days always taxable?
The form uses seven days as an example of an initial period when payment may be discretionary. The rule is that payments left largely to the employer's discretion are taxable. It does not set a universal seven-day rule.
Can a payment qualify for exclusion even if tax was withheld?
Yes. The form requires withholding on wages and salaries even when they qualify for exclusion, except for the listed State Plan, approved private-plan, and insurance-company payments.