Teresa Has a Dental Plan Through Her Employer

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?

A) Her employer will add the $2,500 as an expense in their income statement.
B) She will have to include the $2,500 as additional income.
C) There are no tax consequences at all as benefits are tax-free.
D) Teresa will have to claim half of the benefit as income.

Correct Answer:

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