MAG Trading Co. established a tax-qualified, long-term care insurance plan for its employees. Which of the following statements is NOT correct?

Insurance

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MAG Trading Co. established a tax-qualified, long-term care insurance plan for its employees. Which of the following statements is NOT correct?

A) Benefits received from the plan are subject to income tax.

B) Premiums paid by MAG Trading are considered a necessary business expense for tax purposes.

C) MAG Trading can take a deduction for the premiums it pays.

D) MAG Trading’s employees can exclude from income any employer-paid premium contributions.

Answer: A) Benefits received from the plan are subject to income tax.

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