Tonya's employer pays the full premium on a disability income policy from an insurance company on behalf of all employees.After a skiing accident,Tonya was out of work for three months and collected $2,000 per month ($6,000 total)of disability benefits from this policy.In addition,Tonya received another $1,000 per month ($3,000 total)from a disability policy she had purchased herself.Tonya had paid a total of $1,300 in premiums on her policy.How much of the $9,000 total received is taxable?

Question

Quizplus · Accepted Answer

The $6,000 received from the employer-paid policy is taxable because the employer paid the premiums. The $3,000 from Tonya's own policy is not taxable because she paid the premiums herself.

Tonya's Employer Pays the Full Premium on a Disability Income