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Increased Tax Relief for Public Safety Retiree Healthcare Costs

This act increases the amount public safety retirees can exclude from their taxable income for health and long-term care insurance premiums. This means more of their retirement distributions used for these purposes will be tax-free, potentially improving their financial well-being. The changes will take effect from 2026.
Key points
Increases the tax exclusion amount from $3,000 to $6,000 annually for health and long-term care insurance for public safety retirees.
Applies to distributions from governmental retirement plans used for these specific insurance types.
The new rules will be effective for taxable years beginning after December 31, 2025.
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Status: Introduced
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Additional Information
Print number: 119_HR_3327
Sponsor: Rep. Bacon, Don [R-NE-2]
Process start date: 2025-05-13