Question

Which of the following taxpayers has only nontaxable income?

Dale received workers' compensation, a cash gift from his father, and a rebate from an office supply store for a printer he purchased.


Destiny received child support payments for her children. She also had interest from her savings account.


Krista received disaster relief payments after a federally declared disaster and had wages from her employer.


Maverick received a settlement due to an injury to his right leg. He receives long-term disability payments from a policy for which his employer paid the premiums.

Answer 1

Dale.

Explanation (brief):
- Dale: workers' compensation (excludable), cash gift (recipient excludes gifts), and a store rebate (treated as a purchase price adjustment/rebate, not taxable income) — all nontaxable.
- Destiny: child support is nontaxable, but bank interest is taxable.
- Krista: qualified disaster relief can be excluded, but wages are taxable.
- Maverick: personal-injury settlement for the leg is excludable, but long‑term disability payments are taxable because the employer paid the premiums.