News & Updates

Qualified Health Insurance Premiums – Retired Public Safety Officers

The Pension Protection Act of 2006 (PPA) was signed into law August 17, 2006, and implemented by the South Carolina Retirement Systems in January 2007. The provisions of the PPA allowed for the exclusion from income a maximum of $3,000 of qualified health and long term care insurance premiums for eligible retired public safety officers. The legislation further required that premiums be deducted from the distribution of a retiree’s annuity and paid directly to the insurance provider.

The Internal Revenue Service (IRS) recently ruled that there is no special reporting on the 1099-R for the qualified premiums and retirees will need to claim the associated tax benefits on their individual income tax returns.

In late January 2008, the Retirement Systems will provide retirees with a statement of the total amount of qualified premiums deducted for 2007 along with instructions for reporting the eligible qualified premiums on their individual income tax return. Retirees may also refer to Page 22 of the IRS Instructions for Form 1040 and Schedules A and B. This publication is available at www.irs.gov.