Who qualifies for the PSO status which allows a $3,000 income deduction?

[DLKB]

My husband is a retired corrections officer. Turbo Tax gave him the $3,000 income deduction and now IRS is questioning the deduction.

[bwa · Accepted solution]

I assume you're taking about the pension provisions regarding retired public safety officers.      

Other than the statute, there is little guidance on what actually qualifies. The statute defines a "public safety officer" using the definition in 42 U.S.C. 3796b (9)(A). There is no list in the statute of positions that qualify, you just need to determine if you meet the definition. That definition is here:   http://www.law.cornell.edu/uscode/text/42/3796b . It covers the obvious positions such as law enforcement officer, firefighter, member of a rescue or ambulance crew, corrections and parole officer, etc. However, if your position is not that obvious, you need to actually read the statute to see if it is included. (It's not a fun read.)

In your husband's case, a Corrections Officer is specifically included in the Sec. 3796b definition.  It includes in subsection (6) “law enforcement officer” means an individual involved in crime and juvenile delinquency control or reduction, or enforcement of the criminal laws (including juvenile delinquency), including, but not limited to, police, corrections, probation, parole, and judicial officers

[DLKB]

Thanks so much for your prompt and thorough answer!

[dmertz]

Also note that to be eligible for this exclusion from income, the payment for health or long-term care insurance must be made directly from the plan to the insurance provider.

Note that the IRS sometimes misses the "PSO" indication on Form 1040 line 16 or Form 1040A line 12 when transcribing a mailed tax return.  If the IRS is generally questioning the reduction of the taxable amount, rather than explicitly questioning whether or not the amount paid for insurance payment qualifies for the exclusion from income, this could be the reason.

[georgen0w]

But does this provision apply to pensions that have amounts excluded to pay for the spouse's health insurance premiums, but not the retiree's premiums?

My situation, the wife in a couple retired as a police dispatcher. Her pension deducts $700 a month to pay for her husband's health insurance. Can they take the exclusion on their joint return?

- Ky