| January 21, 2008 |
IRS Publication 721 (page 15) gives instructions of how to claim this deduction on your tax forms. The link is http://www.irs.gov/pub/irs-pdf/p721.pdf to the pdf file.
This form is also obtainable as a web page at http://www.irs.gov/publications/p721/index.html which is a bit easier because it has a clickable index and downloads faster.
The direct link to the section for how to claim this benefit for Federal PSO's is
http://www.irs.gov/publications/p721/ar02.html#d0e2437
IRS Publication 575 contains the same information for state and local PSO's at http://www.irs.gov/pub/irs-pdf/p575.pdf.
The Form 1040 instructions for this are:
Insurance Premiums for Retired Public Safety Officers
If you are an eligible retired public safety officer (law enforcement officer, firefighter, chaplain, or member of a rescue squad or ambulance crew), you can elect to exclude from income distributions made from your eligible retirement plan that are used to pay the premiums for accident or health insurance or long-term care insurance. The premiums can be for coverage for you, your spouse, or dependents. The distribution must be made directly from the plan to the insurance provider. You can exclude from income the smaller of the amount of the insurance premiums or $3,000. You can only make this election for amounts that would otherwise be included in your income.
An eligible retirement plan is a governmental plan that is:
- a qualified trust,
- a section 403(a) plan,
- a section 403(b) annuity, or
- a section 457(b) plan.
If you make this election, reduce the otherwise taxable amount of your pension or annuity by the amount excluded. The amount shown in box 2a of Form 1099-R does not reflect the exclusion. Report your total distributions on line 16a and the taxable amount on line 16b. Enter “PSO” next to line 16b.
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