PRIA, Government Policy, Made Personal

Summary

You can keep part of a pension or annuity from being taxed if you are a first responder who received tax-free disability payments before you reached retirement age. The pension must come from certain retirement plans and must be paid because of your first responder work. "Annualized excludable disability amount" means the tax-free disability payments that apply to the 12-month period right before you reach retirement age. "Service-connected excludable disability amount" means regular payments that are already tax-free, are tied to your first responder duties, and stop when you reach retirement age. If those payments only covered part of that 12-month period, they are annualized by multiplying by 365 and dividing by the number of days covered. "Qualified first responder service" means work as a law enforcement officer, firefighter, paramedic, or emergency medical technician.

Title 26, §139C

Internal Revenue Code, Source: USLM XML via OLRC

(a)In general

In the case of an individual who receives qualified first responder retirement payments for any taxable year, gross income shall not include so much of such payments as do not exceed the annualized excludable disability amount with respect to such individual.

(b)Qualified first responder retirement payments

For purposes of this section, the term “qualified first responder retirement payments” means, with respect to any taxable year, any pension or annuity which but for this section would be includible in gross income for such taxable year and which is received—

(1)from a plan described in clause (iii), (iv), (v), or (vi) of section 402(c)(8)(B), and

(2)in connection with such individual’s qualified first responder service.

(c)Annualized excludable disability amount

For purposes of this section

(1) In general

(2)Service-connected excludable disability amount

The term “service-connected excludable disability amount” means periodic payments received by an individual which—

(A)are not includible in such individual’s gross income under section 104(a)(1),

(B)are received in connection with such individual’s qualified first responder service, and

(C)terminate when such individual attains retirement age.

(3)Special rule for partial-year payments

In the case of an individual who only receives service-connected excludable disability amounts properly attributable to a portion of the 12-month period described in paragraph (1), such paragraph shall be applied by multiplying such amounts by the ratio of 365 to the number of days in such period to which such amounts were properly attributable.

(d)Qualified first responder service

For purposes of this section, the term “qualified first responder service” means service as a law enforcement officer, firefighter, paramedic, or emergency medical technician.

Notes & Related Subsidiaries

Editorial Notes

Prior Provisions

A prior section, added Pub. L. 111–5, div. B, title III, § 3001(a)(15)(A), Feb. 17, 2009, 123 Stat. 465; amended Pub. L. 111–144, § 3(b)(5)(B), Mar. 2, 2010, 124 Stat. 44, related to COBRA premium assistance, prior to repeal by Pub. L. 115–141, div. U, title IV, § 401(d)(7)(C), Mar. 23, 2018, 132 Stat. 1212.

Statutory Notes and Related Subsidiaries

Effective Date

Pub. L. 117–328, div. T, title III, § 309(c), Dec. 29, 2022, 136 Stat. 5346, provided that: “The

Amendments

made by this section [enacting this section] shall apply to amounts received with respect to taxable years beginning after December 31, 2026.”

§139C Certain Disability-related First Responder Retirement Payments