IMPORTANT INFORMATION FOR RETIRED PUBLIC SAFETY OFFICERS

Exclusion from Gross Income of Payments for Health Insurance Premiums

The provisions of the Pension Protection Act of 2006 (“PPA”) allows eligible retired public safety officers to exclude from their gross income an amount up to $3,000.00 that is deducted from their retirement allowance for health insurance premiums.

 WHICH RETIREES ARE ELIGIBLE FOR THIS EXCLUSION?

Public safety officers who retired for disability or who retired after having attained “normal retirement age.”  The term “normal retirement age” means the age that a member can retire with an unreduced benefit.  Normal retirement age for Group 4 members is age 55, while for Group 1 it would be 65.

 WHAT IS THE DEFINITION OF “PUBLIC SAFETY OFFICER”?

Under the definition governed by the PPA, a “public safety officer” is an individual serving a public agency in an official capacity, with or without compensation, as a law enforcement officer, as a firefighter, as a chaplain, or as a member of a rescue squad or ambulance crew.

HOW MUCH CAN BE EXCLUDED FROM TAXABLE INCOME?

The maximum exclusion is the lesser of the actual premiums paid OR $3,000.00.  If premiums are withheld for more than one insurance carrier, the total aggregate amount excludable is $3,000.00. 

IS A SURVIVOR OF AN ELIGIBLE RETIREE ELIGIBLE FOR THE EXCLUSION?

          The exclusion is only available to eligible retirees.

HOW DO I KNOW HOW MUCH I PAID IN HEALTH INSURANCE DURING 2007?

On the stub of your final retirement check, dated December 31, 2007, the YEAR TO DATE figures for all of you deductions are outlined.  If you believe that you qualify and do not know the amount of health insurance premiums that you paid in 2007, please feel free to contact the retirement office at 617-972-6456.

IMPORTANT:

Ø       You need to file a federal income tax return in order to take advantage of the exclusion.  If you don’t file a federal return, then the exclusion will not benefit you.

Ø       Your health insurance contribution must be deducted from your pension check.  Medicare Part B premiums do not qualify for the exclusion.

If you have your federal tax return prepared by someone, make certain that they are aware of the exclusion.  Read the federal forms and instructions carefully to determine if you qualify.