Retiree News

Tax Forms Coming in January

If you received a monthly retirement benefit from VRS in 2024, expect a Form 1099-R from VRS by U.S. mail in late January. The Form 1099-R shows your benefit payments, taxes withheld and other information for the previous calendar year. Use the form to complete your 2024 federal and state income tax returns. The form will also be available in your myVRS account no later than January 31.

Reminder: Imputed Income Subject to Taxes

If you were covered under the VRS Group Life Insurance Program as a member, this benefit follows you into retirement. If the value of your group life insurance coverage exceeds $50,000, the value of the excess amount is considered imputed income and is subject to income taxes and FICA (Social Security and Medicare) taxes.

If you have VRS group life insurance coverage, VRS automatically withholds FICA taxes and sends you a Form W-2 each year showing the amount withheld and the additional taxable income.

Use the Form W-2 to file federal and, if applicable, state income taxes. As your life insurance coverage reduces, the amount of imputed income also reduces. If your coverage reduces to less than $50,000, these taxes will no longer be withheld, and you will no longer receive a W-2 from VRS. Learn more about VRS group life insurance and how it reduces over time.

Changing Your Survivor Option

Under certain circumstances, you can name a new survivor or revert to the Basic Benefit if you chose the survivor option as your benefit payout option at retirement. Contact VRS if one of the following qualifying events occur:

• Your survivor dies.
• Your survivor is your spouse and you divorce with fewer than 20 years of marriage.
• Your survivor is your spouse, you divorce after 20 or more years of marriage and your survivor dies, remarries or consents in writing to a change in the benefit.
• You provide VRS a written consent from your survivor giving up claim to a benefit along with proof of your survivor’s good health.

You can change the Survivor Option only once during your lifetime. If you revert to the Basic Benefit instead of naming a new survivor, the Basic Benefit is payable retroactively no more than 60 days from the date VRS receives your completed authorization form. Learn more under Benefit Payout Options.

Retired Public Safety Officers Eligible for HELPS

The federal Healthcare Enhancement for Local Public Safety (HELPS) Retirees Act allows eligible retired public safety officers to exclude a certain amount per year from retirement income used for qualified health insurance premiums or long-term care insurance premiums.

Premiums covering yourself, your spouse and dependent children may be eligible for this tax exclusion. You must claim the insurance premium exclusion on your tax return. The Form 1099-R that you receive reflects total taxable income without any adjustment for this benefit. For more information, contact a tax advisor or the IRS at 800-829-1040, or visit irs.gov.