HELPS is a new retiree health care benefit that provides a tax-free distribution of up to $3,000 from retirement plans to help retirees pay for health insurance or long-term care insurance.
The IAFF won an unprecedented congressional victory with the passage of the
Health Care Enhancement for Local Public Safety Officers (HELPS) act. Under
it, retirees can receive a tax-free distribution of up to $3,000 from retirement plans to help pay for health insurance or long-term care insurance premiums. The IAFF encourages affiliates to remind retirees about the HELPS benefit.
Under the benefit, the IRS will allow retired fire fighters to exclude from income distributions made from eligible retirement plans up to $3,000 annually to pay the
costs for accident or health insurance or long-term care insurance. The funds
can cover the retiree, spouse or dependents. The distribution must be made directly from the retirement plan to the insurance provider. Eligible retirement plans include qualified trusts, section 401(a), section 403(a) plans, section 403(b) annuities and section 457(b) plans.
Read questions and answers written with fire fighters in mind.
IAFF Q&A (PDF)
The IRS requires retirees to report total distributions on Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a. The taxable amount should be reported on Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. Also, retirees should write “PSO”
(for public safety officer) next to the appropriate line where the taxable amount is reported.
For tax accountants: refer to code section 402(l).
Download IRS 2014 Form 1040 (PDF with helpful highlights)
Download IRS 2014 Form 1040 Instructions (PDF with helpful highlights
on pages 25-26)
Download IRS 2014 Publication 575 - Pension and Annuity Income (PDF with helpful highlights on pages
National Conference on Public Employees Retirement Systems (HELPS website)