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Robin D.
Robin D., Senior Tax Advisor 4
Category: Tax
Satisfied Customers: 13323
Experience:  15years with H & R Block. Divisional leader, Instructor
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I am a retired police office that was totally disabled. I recieve

Resolved Question:

I am a retired police office that was totally disabled. I recieve money from a privately purchased disability policy (34,000) and a dsitribution of 11,000 from my Policemen's Annuity and Benefit Fund. This distribution is used to pay my BC/BS insurance premiums for myself and my spouse. This is the only family income. How much of this is taxable?
Submitted: 4 years ago.
Category: Tax
Expert:  Robin D. replied 4 years ago.

Robin D :

Hello and thank you for using Just Answer.
If you paid all the premiums on the private disability policy and never received a tax break on the premiums when you were paying them, then that amount is not taxable to you. You need to report it on the return but $0 as taxable portion.

Robin D :

As far as your Policeman's annuity,


If you retired on disability, you must include in income any disability pension you receive under a plan that is paid for by your employer. You must report your taxable disability payments as wages on line 7 of Form 1040 or Form 1040A until you reach minimum retirement age. Minimum retirement age generally is the age at which you can first receive a pension or annuity if you are not disabled.

Customer:

I assumed that but wanted to be sure. My other withdrawal comes from my City of Chicago PAB fund and all of that goes to pay insurance premiums

Robin D :

Yeah there is a special deduction for Police officers and insurance one sec while I refresh my "old " memory on that

Customer:

Thanks

Robin D :

The distribution must be made directly from the plan to the insurance provider. You can exclude from income the smaller of the amount of the insurance premiums or $3,000. You can only make this election for amounts that would otherwise be included in your income. The amount excluded from your income cannot be used to claim a medical expense deduction.
If you make this election, reduce the otherwise taxable amount of your pension or annuity by the amount excluded. The taxable amount shown in box 2a of any Form 1099-R that you receive does not reflect the exclusion. Report your total distributions on Form 1040, line 16a; Form 1040A, line 12a; or Form 1040NR, line 17a. Report the taxable amount on Form 1040, line 16b; Form 1040A, line 12b; or Form 1040NR, line 17b. Enter “PSO” next to the appropriate line on which you report the taxable amount.

Customer:

so my final taxable amount is the net of the total distribution less $3,000 ?

Robin D :

Correct

Customer:

thank you

Robin D :

You are welcome and thanks in advance for clicking ACCEPT

Robin D :

Best of the New Year to you and yours

Robin D. and 2 other Tax Specialists are ready to help you

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