First of all, don't change anything about your 1099-R. Report it as it appears to you, because that's what the IRS will receive. Don't leave anything blank if there's an entry on your 1099-R.
- After you enter your 1099-R, you'll continue in TurboTax, and check that you were a Public Safety Officer.
- On the screen Did the Pension Administrator Pay for Health Insurance? answer yes, if that's true.
- On the next screen, enter the amount taken out of your pension to pay for health insurance.
That's it. TurboTax will calculate the amount of your exclusion, which is the lesser of $3000 or your actual payments for medical insurance. It will show up on your return, Form 1040, on line 16b as a reduction in your taxable pension, with PSO notated next to line 16a for Public Safety Officer.
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