Are difficulty Difficulty of Care payments taxable in state? I understand they are not federally taxable, but I can not find any information regarding state taxation of DOC income, specifically New Jersey in my particular case. 

Also, the company my taxpayer collected income from did not collect and file the required DOC exemption forms and listed the income as federally taxable and they are stating that they will not amend the W-2 even though she fully qualifies for it. How to go about not showing the income for federal purposes.