The IAFF won an unprecedented congressional victory with the passage of the Healthcare 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 a qualified trust, a section 403(a) plan, a section 403(b) annuity, or a section 457(b) plan.
Q&A
Read questions and answers written with fire fighters in mind.
Tax Instructions
The IRS requires retirees to report total distributions on Form 1040 or Form 1040-SR, line 5a. The taxable amount should be reported on Form 1040 or 1040-SR, line 5b. Also, retirees should write “PSO” (for public safety officer) next to the appropriate line where the taxable amount is reported. Please see the highlighted section on page 26 of the Form 1040 Instructions below. For tax accountants: refer to code section 402(l).
IRS 2020 Form 1040
IRS 2020 Form 1040 Instructions (see page 26)
IRS Current Version Publication 575 – Pension and Annuity Income
Learn More
National Conference on Public Employees Retirement Systems (HELPS website)
