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Retiree Health Insurance Premium Tax Exclusion

IRS Form 1040 and 1040A Instructions


The Pension Protection Act of 2006 allowed eligible Public Safery 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 2007 paycheck stub for the amount they have paid for health insurance premiums in 2007 (call the Pension Office if you need another copy of the December 2007 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 premuim payments from their taxable income. Click on the IRS Form 1040 (page 22) or Form 1040A (page 23) Instructions below for further instructions on how to exclude these premiums.

IRS Form 1040a Instructions

IRS Form 1040 Instructions

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