Teresa has a dental plan through her employer. Recently, she has undergone dental work costing the plan $2,500. Luckily for Teresa, this particular dental work was covered completely by her dental plan. What are the tax consequences as a result of Teresa not having to pay for the dental work?

Question

Quizplus · Accepted Answer

Benefits received from an employer's dental plan are generally tax-free and do not have to be reported as additional income. Therefore, there are no tax consequences for Teresa not having to pay for the dental work covered by her dental plan. Option A is incorrect because adding the cost of the dental work as an expense in the employer's income statement would not affect Teresa's tax situation. Option B is incorrect because Teresa does not have to include the $2,500 as additional income. Option D is incorrect because there is no requirement to claim half of the dental benefit as income.

Teresa Has a Dental Plan Through Her Employer