Section 27-220-VII-7.5 - SPECIAL TAX EXCLUSION FOR QUALIFIED INSURANCE DEDUCTIONSa. Section 845 of the Pension Protection Act of 2006 amends Internal Revenue Code §402 to allow an Eligible Retired Public Safety Officer to make an election to exclude from federal gross income an amount not to exceed $3,000 of his or her retirement plan benefits if such amount is deducted from the Eligible Retired Public Safety Officer's benefit and is used to pay qualified health insurance premiums. Qualified health insurance premiums include premiums for accident and health insurance or qualified long-term care insurance. Amounts deducted from the retirement benefit payable from the Plan may be paid directly to the participant. The Eligible Retired Public Safety Officer must include with their tax return for the year in which the distribution is made an attestation that such funds do not exceed the amount paid by the Eligible Retired Public Safety Officer for qualified health insurance premiums in the year of the distribution to qualify for the exclusion. For this purpose, all eligible retirement plans, including this Plan, must be treated as a single plan.b. The exclusion is only available to an Eligible Retired Public Safety Officer who, by reason of disability or attainment of normal retirement age, retired from service as a public safety officer with the Employer who maintains this Plan.c. An Eligible Retired Public Safety Officer means an individual who served and retired from public service by reason of disability or attainment of normal retirement age with a public agency in an official capacity as a law enforcement officer, as a firefighter, as a fire or police department chaplain, or as a member of a rescue squad or ambulance crew, as may be defined from time to time by the Department of Justice. The Internal Revenue Service shall have the final determination as to whether an individual is an Eligible Retired Public Safety Officer.
d. As an alternative to paying the amounts to the Eligible Retired Public Safety Officer directly, an Eligible Retired Public Safety Officer may elect to have eligible premiums withheld from his or her retirement or disability retirement benefit and paid by the Plan directly to the insurance provider. To the extent allowed by law, the retiree may make such election prospectively for the current and future years.e. In administering the tax exclusion, the Plan is only responsible for performing the administrative functions associated with the deduction and payment of qualifying insurance premiums, if elected by the Eligible Retired Public Safety Officer. The Eligible Retired Public Safety Officer is and remains responsible for income tax liability for retirement benefits paid by the Plan. The Plan has no responsibility for tax liability, including interest and penalties, that may arise from an Eligible Retired Public Safety Officer's election to exclude any amounts from income.27 Miss. Code. R. 220-VII-7.5