Springfield, IL-(Effingham Radio)-Thousands of retired first responders in Illinois and nationwide may reduce their taxable earnings by up to $3,000 by taking advantage of a deduction to which they are entitled by federal law.
The Illinois Public Pension Fund Association (IPPFA) is reminding retired public safety officers about 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.
“We want to be sure that police, fire and EMS retirees throughout Illinois and the country take advantage of this opportunity, especially during these financially challenging times,” said IPPFA President James McNamee. “Understanding this deduction will help these first responders to plan and enjoy a more successful retirement.”
To qualify for the HELPS deduction, the premium must be deducted from the retiree’s pension check or another eligible government plan maintained by the employer, such as a deferred compensation distribution, and remitted directly to the healthcare provider or insurance company. 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 4B. Instructions on claiming the deduction are included in IRS Publication 575, page six, 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 the health insurance premium payment is to be made from a deferred compensation plan, the plan administrator will have the information that is needed.
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.
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