UI/HC/WD on a New Jersey W-2 is a single combined payroll deduction covering three state programs: Unemployment Insurance, the Health Care Subsidy Fund, and the Workforce Development Partnership Fund. Your employer withholds all three at a combined rate of 0.425% on your first $44,800 of wages for 2026, so the most any single employer can take out in a full year is $190.40.1State of New Jersey Department of Labor & Workforce Development. Rate Information, Contributions, and Due Dates The total shows up as one lump sum in Box 14 rather than three separate lines, which is why the code looks cryptic even though the math behind it is straightforward.
What Each Letter Pair Pays For
The three programs bundled under this one code serve different purposes:
- UI (Unemployment Insurance) funds weekly benefits for workers who lose a job through no fault of their own.
- HC (Health Care Subsidy Fund) helps New Jersey hospitals cover the cost of treating uninsured and underinsured patients.
- WD (Workforce Development Partnership Fund) pays for job training, vocational education, and skills programs for workers upgrading or changing trades.
Why You Might See It Called UI/WF/SWF Instead
The state’s own forms, including the NJ-2450, label this same deduction “UI/WF/SWF.” The “WF/SWF” piece stands for Workforce Development and Supplemental Workforce Funds, which bundles the HC and WD portions under a different name. The amount is identical. If your W-2 says UI/HC/WD and your tax form says UI/WF/SWF, you’re looking at the same money.
The 2026 Rate and the $190.40 Cap
For 2026, the taxable wage base is $44,800, up from $43,300 the previous year.2Business.NJ.gov. Unemployment and Disability Insurance Rates Increased for 2026 Withholding stops once your year-to-date wages at that employer pass the base. The breakdown:
- UI: 0.3825% of wages up to $44,800, maximum $171.36
- WF/SWF (the HC and WD portions): 0.0425% up to $44,800, maximum $19.04
Combined, that’s 0.425% and a $190.40 annual ceiling per employer.1State of New Jersey Department of Labor & Workforce Development. Rate Information, Contributions, and Due Dates A single employer should never withhold more than $190.40 for 2026. If yours did, call the payroll department rather than trying to fix it on your tax return.
The cap applies per employer, not per person. If you worked two or more NJ jobs during the year, each employer withheld from your paychecks independently, and your total across all of them can exceed $190.40.
How to Enter UI/HC/WD in Tax Software
When you type in your W-2, tax software asks you to categorize each Box 14 entry so it knows where the amount belongs on your return. Pick these:
- For the UI/HC/WD amount, choose NJ UI/WF/SWF Tax. The dropdown uses the state’s label even though your W-2 doesn’t.
- If you also have a DI amount (disability insurance), choose NJ SDI.
- If you have an FLI amount (family leave insurance), choose NJ FLI.
If an exact match isn’t in the dropdown, look for a general “Other deductible state or local tax” option rather than “Other — not on list.” Picking the right category tells the software these are deductible state taxes, not miscellaneous employer notes.
Getting a Refund If You Worked Multiple NJ Jobs
When two or more employers each withheld UI/HC/WD on your wages, your combined total probably went over $190.40, and you can claim the excess back on your New Jersey return using Form NJ-2450, filed with your NJ-1040.3NJ.gov. Form NJ-2450 – Employees Claim for Credit for Excess UI/WF/SWF, Disability Insurance, and/or Family Leave Insurance Contributions The steps:
- Pull the Box 14 amounts from every NJ W-2 you received for the year.
- Fill out NJ-2450 with each employer’s withholding figures. If a single employer withheld more than the $190.40 cap on its own, that’s an employer error. Enter only the maximum for that employer on the form and ask the employer to refund the difference directly.
- Carry the excess UI/WF/SWF amount from Line 4 of the NJ-2450 over to Line 59 of your NJ-1040. Excess DI goes on Line 60; excess FLI on Line 61.4NJ.gov. 2025 Form NJ-1040 Instructions
- Attach every W-2 to the return. The state will reject the claim if a W-2 is missing or if an entry on the form isn’t backed by one.
Filing jointly? Each spouse needs a separate NJ-2450. A single combined form for both people won’t be accepted.3NJ.gov. Form NJ-2450 – Employees Claim for Credit for Excess UI/WF/SWF, Disability Insurance, and/or Family Leave Insurance Contributions
Can You Deduct It on Your Federal Return?
Yes, if you itemize. The IRS lists New Jersey’s contributions to the unemployment fund and the disability benefit fund among the state taxes you can include on Schedule A, Line 5a, and family leave contributions qualify as well. They fall under the state and local tax (SALT) cap, which for 2025 is $40,000 ($20,000 if married filing separately) and is indexed for inflation.5Internal Revenue Service. Instructions for Schedule A (Form 1040) At under $200 a year, UI/HC/WD on its own won’t change anyone’s tax bill much, but it adds to the pile along with your NJ income tax and property tax. If you take the standard deduction, it doesn’t reduce your federal tax.
Box 14 Is Splitting Into 14a and 14b for 2026
Starting with the 2026 tax year, the IRS has split Box 14 on the W-2 into two sub-boxes. Box 14a is labeled “Other,” and anything employers used to report in the single Box 14 field now goes in Box 14a.6Internal Revenue Service. 2026 General Instructions for Forms W-2 and W-3 Your NJ codes should appear in Box 14a going forward. The amounts and the rules haven’t changed, only the location on the form. If tax software asks which sub-box an entry came from, choose 14a.