Loretta received $6,200 from a disability insurance policy that she purchased directly this year. Loretta must include all $6,200 in her gross income.

Question

Quizplus · Accepted Answer

Generally, disability insurance benefits received by an individual are tax-free if the individual paid for the policy premium with after-tax dollars. Therefore, Loretta does not have to include the $6,200 as gross income on her tax return if she paid for the premiums with after-tax dollars.

Loretta Received $6,200 from a Disability Insurance Policy That She