Special Provisions - FERS - Tax Benefit from the HELPS retirees improvement act ; image: Gov. Hogan and First Responders
  • Signed into law in 2006, the “HELPS” Retirees Act allows for penalty-free withdrawals from the TSP each year.
  • $3000 was the annual limit and the money has to be for FEHB or LTC insurance premiums
  • In 2023, another law pushed the annual allowable amount to $6000, effective in 2024.

Public Safety retirees, including some CSRS and FERS annuitants who occupied public safety positions that were physically demanding (like first responders), are now able to withdraw up to $6000 every year from their traditional TSP account (or other qualified retirement plan) without the money being taxed, or taking a penalty if they're younger than 59½. This can only be done if the withdrawal is covering insurance premiums for FEHB and other health plans or a long-term care policy (whether it is FLTCIP or otherwise.)

What is the HELPS Act?

The “Healthcare Enhancement for Local Public Safety (HELPS) Retirees Act” is what allows for this exemption. For federal employees, it applies to mostly federal firefighters and law enforcement officers (LEOs) that retiring with special provisions. The law was signed in 2006 and effective starting January of 2007.

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In order for the withdrawal to be counted as tax-free, the FEHB or long-term care premiums must be paid directly from the qualified retirement plan to the insurance company. To be eligible, you don’t need to be retired from the federal government, just a retired “public safety officer.” The law defines these positions as law enforcement officers (including corrections, parole, probation, and judicial officers), firefighters, members of a rescue squad or ambulance crew, or as chaplains to fire and police departments.

The HELPS Improvement Act Passed

At the very beginning of last year, the president signed into law the appropriations bill for Fiscal Year 2023 – which included a provision that was based off the Wally Bunker HELPS Improvement Act. Introduced in 2022 by Virginia Congresswoman Abigail Spencer to combat rising healthcare costs, the bill sought to raise the tax-benefit from $3000 dollars to $6000 dollars. The change took effect at the start of this calendar year.


Until Next Time,

Benefits Ben, STWS

**Written by Benjamin Derge, Financial Planner, ChFEBC℠ The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Benjamin Derge and not necessarily those of RJFS or Raymond James. Links are being provided for information purposes only. Expressions of opinion are as of this date and are subject to change without notice. Raymond James is not affiliated with and does not endorse, authorize, or sponsor any of the listed websites or their respective sponsors.

Special Provisions - FERS - Tax Benefit from the HELPS retirees improvement act ; image: Gov. Hogan and First Responders

Tax Benefit from the HELPS Retirees Improvement Act