Excerpts from courierpapers.com:
An existing federal tax deduction for health care expenses can now be used by more police, fire, and EMS personnel nationwide, including in Illinois, and may help to reduce taxable earnings by up to $3,000.
The Illinois Public Pension Fund Association (IPPFA) encourages retired public safety officers to take advantage of the Healthcare Enhancement for Local Public Safety Retirees Act, or the “HELPS” Retiree Act. This act allows retired law enforcement officers, firefighters and emergency services personnel across the United States to lower their taxable pension income by excluding premiums for health insurance. These retirees may reduce their taxable earnings by up to $3,000 for medical insurance premiums paid during a calendar year.
“There was previously a requirement that the premium had to be deducted from the retiree’s pension check in order to qualify for HELPS credit,” said IPPFA President James McNamee. “That is no longer the case following the adoption of the federal Secure 2.0 retirement law. Any premium paid for health, accident or long-term care insurance qualifies for the credit.”
The $3,000 deduction does not appear on the annual 1099R form that is sent out by the pension or retirement fund. The retiree must claim the deduction on his or her personal 1040 tax form on line 5B. Instructions on claiming the deduction are included in IRS Publication 575, page seven, General Information / Insurance Premiums for Retired Public Safety Officers.
Since claiming the deduction is not a simple matter, it is recommended that pensioners consult with their tax preparer to properly make the claim. If pension benefits are administered by a pension administration company, retirees may obtain additional information by contacting that company. Note that married couples where both the parties are retired police/fire/EMS may take a reduction in income of up to $6,000.
The IPPFA was founded in 1985 as a not-for-profit organization whose mandate was to educate public pension fund trustees. In 2009 the IPPFA became the primary education provider for public pension fund trustees in the state of Illinois, and its members manage benefits for more than 40,000 active and retired fire and police personnel with more than $18 billion in pension assets.
