This year Zach was injured in an auto accident.As a result he received the following payments. Zach received $18,000 of disability pay.Zach has disability insurance provided by his employer as a nontaxable fringe benefit.Zach's employer paid $4,300 in disability premiums for Zach this year.
Zach's hospital bills totaled $4,500 and were paid by his health insurance.Zach has health insurance provided by his employer as a nontaxable fringe benefit.Zach's employer paid $6,250 in health insurance premiums for Zach this year.
What amount must Zach include in his gross income?

Question

Quizplus · Accepted Answer

The $18,000 disability pay is taxable because the premiums were paid by the employer and the benefit was received as a result of an injury. The hospital bills and health insurance are not included in gross income as they are nontaxable fringe benefits.

This Year Zach Was Injured in an Auto Accident