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2010 Retiree Health Insurance Tax Exclusion

The Pension Protection Act of 2006 allowed eligible Public Safety Officers to exclude up to $3,000 of their retiree health insurance premiums from their taxable income. The amount used to pay these premiums will remain taxable until the retiree makes the elections to exclude these premiums on their personal income tax returns. Retirees can check their December 2010 paycheck stub for the amount they have paid for health insurance premiums in 2010 (call the Pension Office if you need another copy of the December 2010 paystub mailed to you). The IRS 1040 form and form 1040A will contain special codes for the retiree to indicate that they are electing to exclude the medical premium payments from their taxable income. Check IRS Form 1040 (page 23) or Form 1040A (page 23) Instructions for further instructions on how to exclude these premiums.

IRS: Forms and Publications

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