Public Safety Retirees Act Question

[AW6100]

I understand that, as a retired local firefighter who pays for health insurance premiums out of my firefighter pension, I can decrease taxable earnings by up to $3,000 for those premiums deducted from my pension payments under the Healthcare Enhancement for Local Public Safety Retirees Act (H.E.L.P.S.). The question is this: If I get reimbursed for those health insurance premium payments from a Retired Health Savings (RHS) account (money was put-in pretax when working and now can be taken-out tax-free for qualified medical expenses, including health insurance premiums)- can I still reduce the taxable earnings to offset the premiums?  

Thank you.

[JulieS · Accepted solution]

Yes, you can still exclude the $3,000 paid under the HELPS Act.

But, there is a rule that says you must include in your income any reimbursement for expenses that you deducted or excluded from income. That is called a taxable recovery. 

So, you can exclude the HELPS payments, but if you are reimbursed for the same expense, you need to report it as a taxable recovery.