The Retirement Exclusion For Insurance Premiums Paid For by Eligible Public Safety Officers
The Retirement Exclusion
If you are an eligible retired public safety officer (law enforcement officer, firefighter, chaplain, or member of a rescue squad or ambulance crew), you can elect to exclude from income distributions made from your eligible retirement plan that are used to pay the premiums for accident, health insurance or long-term care insurance. The premiums can be coverage for you, your spouse or dependents. The distribution must be made directly from the plan to the insurance provider, as in a qualified rollover. You can exclude from income the smaller of the amount of insurance premiums or $3,000. You can only make the election for the amounts that would otherwise be included in your income.
An eligible retirement plan is:
- A qualified trust
- A section 403(a) plan
- A section 403(b) annuity, or
- A section 457(b) plan
To make this election, follow these steps:
- Double click FRM 1099-R in the "Attached Forms" pane.
- Select the Retired Public Safety Officer check box.
- Reduce the amount showing in Box 2a Taxable Amount by the eligible premiums paid (limited to $3,000).
