Which of the following statements concerning the federal income tax treatment of employer-provided disability income insurance under a typical noncontributory plan is correct?

A. Employer contributions for disability income insurance result in taxable income to the employee.

B. Contributions by an individual employee for disability income insurance coverage are tax deductible up to $1,125 per year.

C. Employer contributions for an employee’s disability income insurance are fully deductible to the employer as an ordinary and necessary business expense.

D. Benefits paid to an employee under a noncontributory plan are received income tax free.

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