Meg's employer carries insurance on its employees that will pay an employee his or her regular salary while the employee is away from work due to illness.The premiums for Meg's coverage were $1,800.Meg was absent from work for two months as a result of a kidney infection.Meg's employer's insurance company paid Meg's regular salary of $8,000 while she was away from work.Meg also collected $2,000 on a wage continuation policy she had purchased.Meg must include $11,800 in her gross income.

Question

Quizplus · Accepted Answer

The $8,000 paid by the employer's insurance is taxable and included in gross income, but the $2,000 from Meg's own policy is not taxable. Therefore, Meg should include only $8,000 in her gross income.

Meg's Employer Carries Insurance on Its Employees That Will Pay