1. In an employer sponsored disability income program employer contributes 70% of the premium and employee contributes 30%. An employee had an accident and become disabled. The disability income provided by the $4000 per month. Assume the employee’s personal income tax rate is 25% please estimate the employee’s tax liability for this disability income per month.
a) $0
b) $700
c) $300
d) $1000
2. Employees’ disability benefits from disability insurance may be excluded from their taxable income, for example , when the disability benefits are unrelated to the emp;oyee’s absence from work
a) true
b) false
3. The number of credits required to qualify for social security (SS) benefits depends on person’s year of birth and the particular Social Security benefit
A) True
B) False
4. Average Indexed Monthly Earnings represent a person’s earnings prior to normal retirement age (that depends on the year of birth), disability, or death adjusted for changes in the person’s earnings over the course of his or her employment, and changes in average wages in the economy over the same period.
A) True
B) False