Retired Public Safety Officer
    Ref. IRS Pub 17 pg 76; IRS Pub 4012 pg D-36; IRS Pub. 575 pg. 6.

An eligible retired public safety officer can elect to exclude from income distributions of up to $3,000 made directly from a government retirement plan to the provider of accident, health, or long-term disability insurance.

Any excess over $3,000 goes on schedule A as a medical expense.

This exclusion reduces taxable social security, and also reduces AGI which lowers the threshhold for itemized medical expenses.

This is something that is not easy to pick up when you are interviewing a taxpayer. It is usually not on the 1099R. Sometimes a taxpayer will mention it to you but some of them are not even aware of it. The important thing is this: Anytime you have a 1099R which obviously comes from a firemen's pension or a police pension you must ask if there are medical premiums deducted from that pension.