Question

Terry was ill for three months, and missed work during this period, During his illness, Terry received 6,250 in sick pay from a disability insurance policy
What amount are included in Terry gross income under the following independent circumstances
Terry paid 3,560 in premiums for disability insurance this year
What is the amount included for Terry

Terry employer's paid the 3560 in premium for Terry, but Terry elected to have his employer included the 3,560 as compensation on Terry W-2.

Answer 1

amount included in gross income for disability insurance = 6250*3560/3560=6250

b) amount included in gross income =0

note:the employer paid the premium but it is taxable compensation to T.so, it is considered that T is paid the premiums. hence the amount of disability premium is excluded from T gross income