So I figured it out, after spending more time on forum.
I ended up adding buttons to Group that's orientation is Stack.
And once button is clicked, I just toggle visibility.
var win = new Window("palette", "Settings", undefined);
var imgON = "/Users/renderTom/Desktop/Custom\ Checkbox/checkON.jpg";
var imgOFF = "/Users/renderTom/Desktop/Custom\ Checkbox/checkOFF.jpg";
var myGrp = win.add("group");
myGrp.orientation = "stack";
var button = myGrp.add("iconbutton", undefined, ScriptUI.newImage(imgON, undefined, imgOFF, imgON), {style:'toolbutton'});
var buttonOFF = myGrp.add("iconbutton", undefined, ScriptUI.newImage(imgOFF, undefined, imgON, imgOFF), {style:'toolbutton'});
win.show();
button.onClick = function() {
button.visible = false;
buttonOFF.visible = true;
}
buttonOFF.onClick = function() {
buttonOFF.visible = false;
button.visible = true;
}