Can I have more information on how to enter my Police disability income as non-taxable.? I was a Motor-Officer and I was hit ( struck by a mini-bus). I was on long term workman’s comp until the injuries of that accident put me onto a 100% law-enforcement disability
My wife and I are both over 70 and she started receiving a disability pension from her former service years ago with the Israeli police. We do not receive anything from Israel summarizing the payments, such as a 1099-R. Where do we enter these payments on Turbotax and are they taxable? We live in Maryland full-time.
Generally, these payments are not taxable and you do not have to enter them into TurboTax. Per the IRS, you may be able to exclude from income any amounts you receive as a pension, annuity, or similar allowance for personal injury or sickness resulting from active service in one of the following services: armed forces, public health service of foreign service. Per the IRS, don’t include the disability payments in your income if any of the following conditions apply:
- You were entitled to receive a disability payment before September 25, 1975.
- You were a member of a listed government service or its reserve component, or were under a binding written commitment to become a member, on September 24, 1975.
- You receive the disability payments for a combat-related injury. This is a personal injury or sickness that: a. Results directly from armed conflict; b. Takes place while you're engaged in extra-hazardous service; c. Takes place under conditions simulating war, including training exercises such as maneuvers; or d. Is caused by an instrumentality of war.
- You would be entitled to receive disability compensation from the VA if you filed an application for it.
Your exclusion under this condition is equal to the amount you would be entitled to receive from the US Veterans Affairs office.
For more information please see Publication 525.
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Did you all get this sorted out? My borough knew it was not taxable but they withheld my taxes all last year and for retro pay I got for 2 years before. I knew they would make me jump through hoops. But 1.104.1 explains that disability compensation as a disability pension where the benefit amount is not calculated as to age, length of service or prior contributions, it is excludable form gross income. TT employees have only very basic knowledge and don't really know much about unusual or "rare" situations. After forwarding the police pension ordinance adopted by my municipality which says the disability pension must be calculated on the salary at time of disability(or honorable discharge which case-law defines as the date of disability for those that go years in the injury and are determined perm disabled), PA Act 600, as well as 1.104.1, they corrected my 1099-R. I suggest to anyone that finds this in the future, speak with a cpa that will listen to you. More have dealt with these situations that have been in business for a long time. Talk with a cpa who gets the issue and understands it or is open to understanding it. If they don't know, a good cpa will consult others. But if box 2a has an amount listed, it's good to start with your municipality. If they can fix it, you will have smooth sailing.
I'm in serious need of assistance regarding this as well.
I was a career, federal agent - LEO injured on the job and on OWCP for 9 years, then force retired with a disability pension at 41 y/o. My new tax CPA is not privy to the tax - free regs, and only knows about the $ 3,000 deduction. Help? TIA
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