The Internal Revenue Code allows a retired or disabled public safety employee to take a tax deduction of up to $3,000 from their federal income tax return for health insurance or long-term care insurance premiums deducted from their pension payment and paid by IMRF to the insurance company or employer.
The member must have held a public safety position when he or she terminated IMRF participation for retirement or became totally and permanently disabled and is receiving IMRF disability benefits.
Public safety employees include the following:
An individual involved in crime and juvenile delinquency control or reduction, or enforcement of the criminal laws (including juvenile delinquency), including, but not limited to police, corrections, probation, parole, truant officers, and judicial officers;
Professional firefighters
Officially recognized or designated public employee members of a rescue squad or ambulance crew
Officially recognized or designated members of a legally organized volunteer fire department
Officially recognized or designated chaplains of volunteer fire departments, fire departments, and police departments
A maximum of a $3,000 tax deduction can be taken annually on the member’s federal tax return. IMRF reduces the amount of federal income tax withholding to reflect the lower taxable amount of your pension. However, your 1099-R tax statement will show your full pension payments before the deduction for insurance premiums. You take the deduction by reducing the taxable amount of your pension by the amount you paid for insurance premiums when completing Form 1040 or Form 1040A, ”U.S. Individual Income Tax Return.”
The health insurance or long-term care insurance coverage can include the member, spouse, and dependents. However, this tax deduction is available only to the member. It is not available to surviving spouses.
Disabled or retired members will be required to complete
IMRF Form 7.12D, ”Election For Deductions for Health or Long Term Care Insurance Premiums Paid Directly to Insurer” (Exhibit 5N) if he or she is paying premiums directly to the insurance company or
IMRF Form 7.12E, ”Election For Deductions Health or Long Term Care Premiums Paid through Employer or Endorsed Plan Administrator” (Exhibit 5O) if he or she is paying premiums through
His or her former employer because the member is continuing insurance through the employer, or
Doyle Rowe Ltd. because the member is enrolled in an IMRF-endorsed plan.
Download and Print Form 7.12D
Download and Print Form 7.12E