HELP Yourself This Tax Season

It must be that time of the year again; H&R Block commercials are on your TV and Turbo Tax ads have filled your inbox. Regardless of your financial status, finding new tax benefits can be like stumbling over an oasis in the desert.

In 2006, Congress passed the Pension Protection Act of 2006 (P.L. 109-280), which included the Healthcare Enhancement for Local Public Safety Retirees Act (HELPS Act). This legislation established the HELPS program, which allows retired public-safety officers of all ranks to use $3,000 of pretax money to pay for health insurance premiums or long-term care insurance premiums for themselves, a spouse or dependent.

For the purposes of the fire and emergency service, the term public-safety officer includes firefighters of all ranks, single-role EMS providers and department chaplains. Retirees may qualify for the HELPS program if they reached normal retirement age for their department or retired as a result of a disability.

Unfortunately, the IRS does not permit any survivors of the public-safety retiree, including a spouse, to continue using this benefit after the public-safety retiree has passed away.

It’s also important to note that a retirement plan must be structured in certain ways to take advantage of the HELPS program. Qualifying retirees must be members of a defined benefit pension plan, a 403(b) plan or a section 457(d) deferred-compensation plan.

Additionally, payments qualifying for pretax deduction must be made directly from the plan to the insurance provider. Fortunately, in cases where both spouses are qualifying retired public-safety officers and filing their taxes jointly, the couple will qualify for an increased pretax deduction of $6,000. Unlike other tax programs that often come with expiration dates, Congress authorized the HELPS program in perpetuity.

If you don’t receive a statement from your retirement plan detailing how much pretax money was used to pay your premiums, your plan likely doesn’t participate in the HELPS program. P.L. 109-280 and the IRS regulations don’t contain a requirement for public-safety retirement plans to participate in the HELPS program.

If your retirement plan doesn’t participate in HELPS, consider contacting your plan’s administrator to inquire whether this is due to omission or your plan’s design. If oversight or omission is the reason for your plan’s nonparticipation, changes can be made by your retirement plan’s administrator to allow you to take advantage of the HELPS program.

Tax season can often be a time of frustration. In this case, however, the IRS has established a program that brings strong benefits to retired public safety officers who have given decades of service and protection to their communities. The IAFC encourages eligible public-safety officers to take advantage of the HELPS program if they’re not doing so already. The HELPS program offers an excellent way to decrease your taxable income while still retaining strong benefits for fire and emergency service retirees.

For more information, email the IAFC Government Relations Department or see the HELPS resources available from the National Conference on Public Employee Retirement Systems or IRS Publication #575 (Pension and Annuity Income) (PDF). 

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