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jim-lea
New Member

Can a retired Federal employee deduct cost of Federal health insurance somewhere on his tax return? It used to be deducted from wages (Box 1 of Form W-2) when employed.

When I was employed with the Federal Government, the cost I paid for federal health insurance was deducted from my taxable income in Box 1 of the W-2 form.  For example, if I had wages of, say, $50,000 and I paid, say, $3,000 for health insurance, Box 1 of Form W-2 would show $47,000 of taxable income.  Now that I don't have wages since I retired, I don't see anywhere that you can deduct the cost of federal health insurance.  The cost I paid for health insurance is shown in Box 5 of Form 1099R, which reports my pension income, but changing the amount in Box 5 up or down in TurboTax does not change the amount of tax owed  And health insurance is not deducted from my pension income on 1099R.  An OPM rep suggested I could itemize the amount, but I don't see anywhere to do that.  It appears as if the cost of Federal health insurance is not  deductible for retirees.

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Can a retired Federal employee deduct cost of Federal health insurance somewhere on his tax return? It used to be deducted from wages (Box 1 of Form W-2) when employed.

It is deductible, but as an itemized deduction on Schedule A.  Only your medical expenses including the premiums in excess of 7.5% of your AGI (10% if you are under 65) count toward your itemized deductions, and your itemized deductions in total must be greater than your standard deduction for this to have an impact on your tax liability.

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4 Replies

Can a retired Federal employee deduct cost of Federal health insurance somewhere on his tax return? It used to be deducted from wages (Box 1 of Form W-2) when employed.

It is deductible, but as an itemized deduction on Schedule A.  Only your medical expenses including the premiums in excess of 7.5% of your AGI (10% if you are under 65) count toward your itemized deductions, and your itemized deductions in total must be greater than your standard deduction for this to have an impact on your tax liability.

jim-lea
New Member

Can a retired Federal employee deduct cost of Federal health insurance somewhere on his tax return? It used to be deducted from wages (Box 1 of Form W-2) when employed.

Thank you.  That was a superb, thoroughly written, perfectly clear response and it helped me.

Can a retired Federal employee deduct cost of Federal health insurance somewhere on his tax return? It used to be deducted from wages (Box 1 of Form W-2) when employed.

Where in Turbo Tax is this information entered?

 

JohnW152
Employee Tax Expert

Can a retired Federal employee deduct cost of Federal health insurance somewhere on his tax return? It used to be deducted from wages (Box 1 of Form W-2) when employed.

@Frank333

This will auto-populate as a Medical Expense on Schedule A in TurboTax when you enter Form CAS 1099-R or CSF 1099-R, whichever you received.

On the Who gave you a 1099-R? page, make sure you click the Office of Personnel Management (CSA 1099-R) or Office of Personnel Management (CSF 1099-R) button as appropriate.

The payer’s information will auto-fill, and you’ll enter the dollar amounts on the Enter your CSA-1099-R details page.

A couple of screens later, you’ll see Enter Health Insurance Amount from Box 5.  After you enter this, it will populate Schedule A as a Medical Expense.

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