Final answer:
If Stephanie becomes disabled, 60% of her disability benefits would be considered taxable, because that is the portion of the premium paid by her employer.
Step-by-step explanation:
The question is related to the taxability of disability insurance benefits. Specifically, if Stephanie pays 40% of her disability insurance premium with after-tax dollars while her employer pays 60%, then only the portion of the benefits equivalent to the employer's contribution (60%) would be considered taxable income for Stephanie if she becomes disabled. This is because disability benefits are taxed based on the portion of the premiums that were paid for by the employer and were not included in the employee's gross income. Therefore, only the part of the benefits attributable to the employer's payments would be subject to taxes.
If Stephanie is disabled, the percentage of her benefits that is taxable depends on whether she paid the premiums with pre-tax or after-tax dollars. In this case, Stephanie pays 40% of the premium with after-tax dollars. This means that if she becomes disabled and receives disability benefits, the portion of the benefits that corresponds to the premium she paid with after-tax dollars would not be taxable. The remaining 60% of the benefits, which corresponds to the premium paid by Blizzard Coolers Inc, would be taxable.