How Can I Enter a Retired Public Safety Officer Pension Exclusion in ProWeb?
Retired Public Safety Officers include; law enforcement officers, chaplain, member of a rescue team or ambulance crew, firefighter among others. Income distributions from eligible retirement plans utilized for payment of the premiums for either accident coverage or health plan or a contract for long-term care insurance can be excluded by taxpayers who are eligible retired public safety officers and elect to make the exclusion. The following should be noted:
- Taxpayers who either retired at the normal retirement age or because of disability are the only ones who can make the election.
- The premium coverages can either be for the taxpayer, their spouse or dependents.
- It is mandatory that the distribution be from the plan managed by the employer from whom the taxpayer retired as a public safety officer.
- It is mandatory that the distribution be made from the plan to the provider of either the health or accident plan or the contract of long term care insurance.
- $3,000 is the maximum amount that can be excluded from income.
- It is only for those amounts that could be included in income that the election can be made.
In Taxx Savage, to exclude the amount for a Public Safety Officer:
- Go to the Federal Section
- Proceed to Income
- Select IRA/Pension Distributions
- Click on Add or Edit a 1099-R
- Then click Begin
- Enter the Payer’s Information
- In Box 1, enter the Gross Distribution as it appears on the 1099-R
- Select ‘click here for options’ on the question; “Do you need to calculate your taxable amount?” is below Box 2a Taxable Amount.
- Select Begin on Public Safety Officers Distribution.
- In the Public Safety Officers Exclusion for Health Insurance Premiums field, enter an amount that does not exceed $3,000.
- Once done, click Continue.
The exclusion amount adjusts the Taxable Amount in Box 2a. Go on to completely fill out 1099-R.
Note: This is not tax advice. It is a guide on how to enter Public Safety Officer Distributions into the Taxx Savage program.
Additional information:
Publication 721, Tax Guide to U.S. Civil Service Retirement Benefits