2023 Law Change for Retired Police Officer Deduction for Health Care Insurance Premiums

[bnjIT-1-]

It still is incorrect at it was raised to $6,000 2/2023.

[bnjIT-1-]

According to how it is worded it does not say household or spouse. It just says increased from $3,000 to $6,000, so I would assume that is a increase for one retired public safety officer

[bnjIT-1-]

I read its now $6,000 per retired officer pension plan and can be paid directlyt to insurer instead of deducted from pension first.

[bnjIT-1-]

I read $6,000 per officers pension plan.

[BillM223]

As I noted above last year, the software is working fine; it's just the wording on the Turbotax screen that needed to be updated.

The $6,000 exclusion was in the Wally Bunker HELPS Retirees Improvement Act; however, I do not think that act passed in that form. This means that the maximum amount of health insurance premium is still $3,000.

Please see the instructions for box 2a on page 11 of the 1099-R instructions.

Where did you see $6,000?

@bnjIT-1- 

[brianc0610]

This still confuses me. If used up my (RHSP) retiree health savings plan monies, and am now paying my health insurance premiums from my monthly pension check myself , am I still eligible for this deduction?

[BrittanyS]

Yes, you can still qualify for the deduction.  The 1099-R deduction can be included if the premiums are made directly to the plan to the provider or from the plan to you to pay the provider.  If your 1099-R was depleted you can only deduct what was taken from your plan up to $3,000.  For example, if you retirement distribution was only $2,000 you can claim the $2,000 for the exclusion.  Here is what TurboTax provides, "The qualified health insurance premiums can be made directly from the plan to the provider of the accident or health plan or long-term care insurance contract, or the distribution can be made to you to pay the provider of the accident or health plan or long-term care insurance contract. The insurance premiums can be used for you, your spouse, or your dependents. The total exclusion cannot exceed $3,000. The premium amount is not included in income and is not subject to the early distribution penalty."

@brianc0610 

[brianc0610]

Thank you, so to clarify if I pay my health insurance out of my pension and not from a 401,457 or RHSP, I am still able to claim the deduction? Example my monthly pension is $8500 and I pay $1400 a month for health insurance out of my pension.  Am I qualified for the deduction?

[BillM223]

brianc0610

You are qualified for up to a $3000 deduction for health insurance for retirees - note that you actually have to pay $3,000 (total for the year, which nearly anyone does).

The only restriction is that you have to have more than $3,000 in retirement income - you may think, of course, but sure enough last year we had a taxpayer who wanted to take the deduction despite having no retirement income.

And to repeat, despite the wording that was in TurboTax (and may still be there for all I know - the $3,000 no longer has to be paid directly by the pension administrator, you can pay it yourself.

@brianc0610 

[brianc0610]

Thanks Bill I always appreciate your help. I think the part that was confusing me is the part I read below. 

Thanks again!

What retirement plans are covered by HELPS?

Qualified governmental defined benefit, IRC Section 403(a), Section 403(b), and Section 457(b) plans are covered by HELPS.

[LaurieB17]

Hi Brian,

 I am able to see the PSO designation on the 1040 line 5a when looking in the forms section of Turbotax. However, when I save to a PDF file to preview what will be filed, the PSO letters are no longer there on my forms. Since my husband pays out of pocket for his health insurance the IRS will not be able to any amounts taken from his 1099-R. I am worried that if I file without the PSO on that line it will look like the numbers for his taxable income are too low. Is there anything I can do to get those letters to show up on the download so I am sure it is getting filed correctly.

Thanks

LaurieB17

[DaveF1006]

It depends. There are two ways to approach this.  you may file electronically and keep those letters for your records, along with your tax return, in case if the IRS requests them at a later time.

You may file by mail and include these letters in the tax return for your own peace of mind. . My suggestion is to file electronically and then keep those letters for future reference, if needed.

[pammby33]

Is the medicare payment from the first responder social security check deductible up to $3000 under the Health Care Insurance act? Also confusing is the spouse medicare payment deductible or do they have to also be a first responder?

[DaveF1006]

Yes, according to publication 575, the spouses is entitled to the same premium deduction. 

[pammby33]

Thanks for the reponse. Main question: are medicare payments considered deductible health care payments for first repsonders. Or does the actual pension payment have to be spent on health care insurance?