Tricare premiums and retirement pay.
Moderator: Aitrus
Tricare premiums and retirement pay.
Anyone paying their Tricare premiums directly out of their retirement pay? I know Tricare premiums paid for indirectly such as monthly with a credit card are not tax deductible. Only insurance premiums paid for directly from your employers pay are tax deductible.
Is that the same for retirement pay?
Currently I'm paying with my credit card monthly for the cash back, but I'm curious if I had the premiums directly taken from my retirement pay if that would make it tax deductible.
Is that the same for retirement pay?
Currently I'm paying with my credit card monthly for the cash back, but I'm curious if I had the premiums directly taken from my retirement pay if that would make it tax deductible.
OCTOBER: This is one of the peculiarly dangerous months to speculate in stocks in. The others are July, January, September, April, November, May, March, June, December, August, and February. - Pudd'nhead Wilson's Calendar
Re: Tricare premiums and retirement pay.
Deducting from retirement pay will not shield you from taxes. The only way I am aware you get a tax break on health care is if you have a health savings account that you bring into retirement. The high deductible health savings accounts allow you to accumulate savings (pretax) including any capital gains from investments. Plus the insurance pays you approx. $1,500 to be in the program as a federal employee. Unfortunately you can't select a high deductible health plan once you retire but the account does transfer with you.
Re: Tricare premiums and retirement pay.
Thought I'd share a similar issue for FEHB- a recent podcast advised that FEHB monthly premiums are not paid pre-tax once you retire. However, the FERS survivor annuity is pre-tax in case anyone was wondering.
Re: Tricare premiums and retirement pay.
Well shucks.
OCTOBER: This is one of the peculiarly dangerous months to speculate in stocks in. The others are July, January, September, April, November, May, March, June, December, August, and February. - Pudd'nhead Wilson's Calendar
Re: Tricare premiums and retirement pay.
Brother,ArrieS wrote: ↑Fri Jan 03, 2020 4:47 pm Anyone paying their Tricare premiums directly out of their retirement pay? I know Tricare premiums paid for indirectly such as monthly with a credit card are not tax deductible. Only insurance premiums paid for directly from your employers pay are tax deductible.
Is that the same for retirement pay?
Currently I'm paying with my credit card monthly for the cash back, but I'm curious if I had the premiums directly taken from my retirement pay if that would make it tax deductible.
I don't think so! I paid through my retirement pay starting last year. However, if you do pay out of pocket then it may not be taxable because you still maintain your status quo even though you are no longer in the Service. Let us assume that is the case, Tricare should give you a form reporting your takes paid. If not, then it is not taxable. You can also call Tricare and ask them! Maybe, they can give you more info on that topic.
Best of Luck!
Re: Tricare premiums and retirement pay.
In retirement Tricare premiums would be after-tax whether you pay them out of pocket or have them deducted.
Medical Premiums paid while you are working are pre-tax, once you retire the deductions are after tax. As such, if you itemize, your premiums would be qualified medical expenses but you can only deduct medical expenses over 7.5% of your AGI, which would be unlikely for most.
Medical Premiums paid while you are working are pre-tax, once you retire the deductions are after tax. As such, if you itemize, your premiums would be qualified medical expenses but you can only deduct medical expenses over 7.5% of your AGI, which would be unlikely for most.
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