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Is there a self employment tax in NJ?

Paterson, NJ |

if someone is self employed in NJ, does he have to pay a self employment tax, and does he have to pay disability and unemployment tax on his income?

Attorney Answers 4


The "self employment tax" is federal - it is for social security and medicare. For 2012, the self employment tax is 13.3 per cent of your gross income.

All S Corps and LLCs must maintain workers comp insurance (it is a crime not to have it)

A sole proprietorship that has employees other than the owner must also carry workers comp.

You would not pay unemployment - but neither would you be eligible for unemployment benefits.

You may want to look into the NJ Self Employment Assistance ("SEA") program which helps people start new businesses in the state.

This answer is for general education purposes only. It neither creates an attorney-client relationship nor provides legal guidance or advice. The answer is based on the limited information provided and the answer might be different had additional information been provided. You should consult an attorney.

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is there any special taxes that a self employed person must pay in New Jersey?


self employment tax

Self employment tax is basically a sole proprietor's self+employer's contribution to social security/medicare.

This can be covered with an elective insurance policy.

unemployment tax

This is a state tax to be paid on a taxpayer's workers. If a sole proprietor usually not, an LLC is disregarded for a single owner. But if the self employed has a "c" corp and pays himself an active salary, he will likely have to have the corp make payments to him as if he were any other regular employee.

Curt Harrington Patent & Tax Law Attorney Certified Tax Specialist by the California Board of Legal Specialization PATENTAX.COM This communication is general information and not legal advice, and does not create an attorney-client relationship. This communication should not be relied upon as any type of legal advice. Please note that no attorney-client relationship exists between the sender and the recipient of this message in the absence of either (1) a signed fee contract and (2) remission of an agreed-upon retainer. Absent such an agreement and retainer, I am not engaged by you as an attorney, nor is any other member of my law firm.

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As the previous attorneys point out, you have to pay self-employment taxes no matter where you are in the US. Most states do not tax these sources but levy other employment related taxes which can be directly correlated with payroll, etc.

Christopher Larson
Insight Law

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Self employment tax is a federal tax and applies to all states including Jersey.

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