By Reg Jones
Q. As long as I’m employed, my Federal Employees Health Benefits premiums are taken from my pay pretax, which is more advantageous than deducting them as an itemized deduction subject to adjusted gross income limits. Does this pretax treatment continue upon retirement for a CSRS retiree, and therefore, my taxable income will be reduced by these premiums? Or will I need to start to claim them as an itemized deduction subject to income limits, which for some means we lose their deductibility after retirement?
A. Retirees are unable to treat their FEHB premiums as pre-tax. You will only be able to include them when you itemize your deductions.
August 18th, 2013 at 10:15 pm
The experts are not exactly correct. The Pension Protection Act of 2006 allows a small subset of Federal Employees to deduct health premiums. If you a Public Safety Officer, you can deduct up to $3,000 if the premiums are paid directly by your retirement plan, i.e., CSRS and FERS. http://www.opm.gov/retirement-services/publications-forms/benefits-administration-letters/2007/07-201.pdf