Joseph's employer pays 70% of the premiums for a disability insurance policy and Joseph pays for the other 30%.The policy pays Joseph 60% of his normal salary in the event he is injured and cannot return to work for an extended period.Joseph was injured in an accident and was unable to work for several months.During the current year, Joseph collected $75,000 under his disability policy.How much does Joseph include in his gross income?
A)$0
B)$22,500
C)$52,500
D)$75,000

Question

Quizplus · Accepted Answer

Since Joseph's employer pays 70% of the premiums, 70% of the benefits received are taxable. Therefore, $75,000 x 70% = $52,500 is included in Joseph's gross income.

Joseph's Employer Pays 70% of the Premiums for a Disability