Paula purchased an individual disability policy offered by her college alumni association to supplement the disability policy provided by her employer. Paula was out on disability for 6 months following a major heart attack. While on disability, Paula received $30,000 from her employer’s disability plan and $20,000 from her individual disability plan. How much of the disability payments does Paula have to include in her individual income tax return?

  1. $0
  2. $20,000
  3. $30,000
  4. $50,000