Service Connected Disability Retirement

[GTS1101]

I have a client who retired as a police officer who had a disability while working. They originally offered him to retire early and get 50% of his retirement tax free for the rest of his life because of his back injury but he did not retire at that time because it was not a career ending surgery and he liked his job. This year he did retire and was told that 33% of his disability retirement will be tax free due to the injury because he is a safety public worker. Has anyone heard of this before? If the 1099 shows all taxable than does the IRS have anything to say about public officers disability retirement plans. I appreciate your help!

Thanks!
GTS1101

[BOB W]

1099R has a box 1 and a box 2 to make that distinction.

[GTS1101]

What if 1099 shows all as taxable?

I understand that part about the 1099. What if the 1099 shows it all as taxable? What if it is not coded correctly? Does he go back to the retirement company to correct it? Has anybody had this issue before?

[Gene V]

I understand that part about the 1099. What if the 1099 shows it all as taxable? What if it is not coded correctly? Does he go back to the retirement company to correct it? Has anybody had this issue before?

I don’t know about police officer, However, I have Vets that retired on disability and part of their retirement pay is not taxable. They only get a 1099 for the part that is taxable.