Earlier we wrote about tax provisions that could reduce federal taxes for those who had property losses during the 2017 and 2018 wildfires in California.
There is another federal tax program that can save retirees money. It applies to retired public safety officers, defined by the IRS as “law enforcement officer, firefighter, chaplain, or member of a rescue squad or ambulance crew”. Basically, you don’t have to pay taxes on money from your retirement annuity that is used to buy health or long-term care insurance. The premiums, up to $3,000, can be for coverage for you, your spouse, or dependents.
Here are a few more details from IRS Publication 721 (page 18):
Publication 721, on page 1 and 2, also describes another benefit for federal firefighters and other public safety federal employees related to early distributions from a governmental plan, spousal benefits, and annuities received by the spouse, former spouse, or child of a public safety officer killed in the line of duty.
Thanks and a tip of the hat go out to Jim. Typos or errors, report them HERE.
Some of the DIY tax software will capture this for you, if you are eligible. Turbo Tax asks if you are a retired FF or LE.
This has been around for a few years but it seems like the rules on how to report it change yearly. Hopefully the professional tax people know the how to.