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Ask the Experts about Tax Law Changes & Forms (2024) >> Event happening NOW!
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PSO Exemption Not Prompted in TT 2024

I entered a 1099 R form from my retirement plan. Box 5 does not contain insurance payments. I am now on Medicare. My plan administrator did not pay for my insurance. I paid Medicare, Medigap, and Drug Plan.  I answered all questions regarding the 1099 and that I was a police officer.  I wasn't offered a box to include the PSO exemption.

I ran across an inquiry from the 2023 taxes where the TP was advised as an alternative to report the $3,000 exemption in this manner:  

You can make an adjusting entry to income as follows:

 

1. From the Federal menu in TurboTax find Wages and Income 

2. Find Less Common Income

3. Choose Miscellaneous Income, 1099-A, 1099-C

4. Choose Other Reportable Income

5. Enter a description of the entry and the adjustment as a negative number

 

I did this, and my taxable income was adjusted, but there is no PSO Exemption notation anywhere on the tax form except on Sch 1, where the —$3,000 is found.  The notation is usually found on Line 5B and written at the bottom of the tax form.

Because I completed my taxes using the alternative method, will this suffice? Will I have to worry about it not being done correctly and the IRS kicks it back?

Thanks

 

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1 Reply
MinhT1
Employee Tax Expert

PSO Exemption Not Prompted in TT 2024

There is a better and proper way to enter the $3,000 Health deduction for retired PSOs.

 

In TurboTax Online, please follow these steps:

 

  1. After you have entered your form 1099-R, continue the questionnaire until you arrive at a page titled Do any of these situations apply to you? 
  2. Put a check mark next to This money is from being a Public Safety Officer and click Continue
  3. On the next page, click on the box Yes, money was taken out to pay for Health Insurance
  4. On the next page, enter an amount up to $3,000 and click Continue
  5. The amount will be excluded from taxation.
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