Questions: Problem 5-38 (Algorithmic) (LO. 2) Matt, age 61, is an officer of Blue Company, which provides him with the following nondiscriminatory fringe benefits in 2024: - Hospitalization insurance premiums for Matt and his dependents. The cost of the coverage for Matt is 2,350 per year, and the additional cost for his dependents is 4,825 per year. The plan has a 3,000 deductible, but his employer contributed 1,500 to Matt's Health Savings Account (HSA). Matt withdrew only 700 from the HSA, and the account earned 85 of interest during the year. - Insurance premiums of 1,050 for salary continuation payments. Under the plan, Matt will receive his regular salary in the event he is unable to work due to illness. Matt collected 6,200 on the policy to replace lost wages while he was ill during the year. - Matt is a part-time student working on his bachelor's degree in engineering. His employer reimbursed his 1,800 tuition under a plan available to all full-time employees. For each of the following items, enter the amount to be included in Matt's gross income. If an amount is zero, enter "0". a. Hospitalization insurance premiums for Matt and his dependents. b. Insurance premiums of 1,050 for salary continuation payments. Amount Included c. The 6,200 Matt collected on the salary continuation policy to replace lost wages while he was ill during the year. d. Tuition reimbursement under a plan available to all full-time employees.

To determine the amounts to be included in Matt's gross income, we need to analyze each fringe benefit provided by his employer and apply the relevant tax principles.

a. Hospitalization insurance premiums for Matt and his dependents:

• The cost of the coverage for Matt is $2,350 per year, and the additional cost for his dependents is $4,825 per year. Employer-provided health insurance premiums are generally excluded from an employee's gross income.
• Amount included: $0

b. Insurance premiums of $1,050 for salary continuation payments:

• Employer-paid premiums for salary continuation insurance are generally excluded from the employee's gross income.
• Amount included: $0

c. The $6,200 Matt collected on the salary continuation policy to replace lost wages while he was ill during the year:

• Payments received under an employer-provided salary continuation plan are included in gross income if the premiums were paid by the employer.
• Amount included: $6,200

d. Tuition reimbursement under a plan available to all full-time employees:

• Employer-provided tuition reimbursement for education assistance up to $5,250 per year is excluded from gross income under Section 127 of the Internal Revenue Code, provided the plan is nondiscriminatory and available to all employees.
• Amount included: $0

Summary: a. Hospitalization insurance premiums for Matt and his dependents: $0 b. Insurance premiums of $1,050 for salary continuation payments: $0 c. The $6,200 Matt collected on the salary continuation policy to replace lost wages while he was ill during the year: $6,200 d. Tuition reimbursement under a plan available to all full-time employees: $0