Police officers filing as W-2 employees lost most of the job-related tax deductions they used to claim, but several meaningful ones remain. Police tax deductions today center on retirement plan contributions, HSA contributions, a health insurance exclusion for retired public safety officers, self-employment write-offs on off-duty work, tax-free treatment of line-of-duty injury payments, and — in many states — the old uniform, gear, and union dues deductions on the state return. Uniforms, equipment, training, mileage, and union dues are no longer deductible on the federal return for active-duty officers, and that change is now permanent.
What You Can No Longer Deduct Federally
Before 2018, officers could deduct unreimbursed job costs — body armor, boots, flashlight batteries, uniform cleaning, training courses, mileage the department didn’t cover, union and fraternal organization dues — as miscellaneous itemized deductions subject to a 2% adjusted gross income floor. The Tax Cuts and Jobs Act suspended that deduction starting in 2018, and the One Big Beautiful Bill Act signed into law in 2025 made the suspension permanent under IRC Section 67(h).1Office of the Law Revision Counsel. 26 U.S. Code 67 – 2-Percent Floor on Miscellaneous Itemized Deductions
The practical result: if your department doesn’t reimburse an expense, you eat the full cost with no federal tax offset. Union dues sit in the same bucket. There is no scheduled sunset and no pending legislation that appears likely to change this.
Two narrow groups still get to deduct unreimbursed expenses federally. Fee-basis state or local officials — those paid partly or entirely through fees rather than salary — can claim these costs as an above-the-line deduction on Schedule 1 using Form 2106.2Internal Revenue Service. Publication 463 (2025), Travel, Gift, and Car Expenses Officers who also serve as Armed Forces reservists can deduct unreimbursed travel expenses when reserve duty takes them more than 100 miles from home, covering lodging, meals, and transportation for the reserve service itself.3Internal Revenue Service. 2025 Instructions for Form 2106 – Employee Business Expenses
Retirement and HSA Contributions
The deductions with the biggest dollar impact for working officers aren’t police-specific — they’re the pre-tax contributions any taxpayer can make. But law enforcement often has unusually good access to them.
457(b) Deferred Compensation
Most departments offer a 457(b) plan, and every dollar you defer comes out of your taxable income. For 2026, the standard limit is $24,500. If you’re 50 or older, an additional $8,000 catch-up brings the total to $32,500. Officers who turn 60 through 63 by the end of 2026 get a special catch-up of an extra $11,250, for a maximum of $35,750. There’s also a separate “last three years before retirement” catch-up that can effectively double the standard limit in some cases. If you also have access to a 401(a) or 403(b) through your employer, you can generally contribute to both plans, doubling your pre-tax savings.
Traditional IRA
You can contribute up to $7,500 to a traditional IRA in 2026, or $8,600 if you’re 50 or older.4Internal Revenue Service. Retirement Topics – IRA Contribution Limits The deduction phases out at higher incomes when you’re covered by an employer retirement plan, which most officers are through a pension or 457(b). Check the IRS phase-out tables for your filing status. This is a common place where officers lose a deduction they were entitled to simply by not knowing the thresholds.
Health Savings Account
If your department offers a qualifying high-deductible health plan, HSA contributions are deductible, grow tax-free, and come out tax-free for qualified medical expenses. The 2026 limits are $4,400 for self-only coverage and $8,750 for family coverage, plus a $1,000 catch-up if you’re 55 or older.5Internal Revenue Service. Notice 26-05 – 2026 HSA Limits Not every law enforcement health plan qualifies, so confirm your plan meets the high-deductible threshold before contributing.
The Retired Public Safety Officer Health Insurance Exclusion
Retired officers get a break active-duty officers don’t. If you separated from service because of disability or after reaching your plan’s normal retirement age, you can exclude up to $3,000 per year from gross income when your eligible retirement plan distributions pay for health insurance, accident insurance, or qualified long-term care insurance premiums.6Internal Revenue Service. Publication 575 (2025), Pension and Annuity Income Coverage can extend to your spouse and dependents.
Distributions must come from an eligible governmental plan such as a 401(a), 403(b), or 457(b). “Public safety officer” for this purpose includes law enforcement officers, firefighters, chaplains, and rescue squad or ambulance crew members. If both spouses are eligible retired public safety officers, each can claim the $3,000 exclusion separately, for a combined $6,000.
To claim it, report the exclusion on Form 1040 and write “PSO” next to the line reporting the taxable amount from your pension distribution. Since SECURE Act 2.0, you no longer need the plan to send the payment directly to the insurer — you can pay the premiums yourself and still claim the exclusion, as long as the distributions cover the cost.
Deductions on Off-Duty and Side Work
Officers who work off-duty security details, private investigations, or consulting jobs often get a set of deductions the day job doesn’t allow. Courts have repeatedly found that off-duty police security work is self-employment income when the hiring business, not your department, controls how the work is performed.7Internal Revenue Service. INFO 2002-0187 – Off-Duty Police Officer Self-Employment
When side work is self-employment, you report it on Schedule C and deduct ordinary and necessary business expenses directly against that income. Mileage to the job site, equipment used exclusively for that work, liability insurance for the side business, a portion of your cell phone bill — all reduce your taxable self-employment income. You’ll owe self-employment tax on the net profit, but half of that tax is itself an above-the-line deduction on Schedule 1.
If your side work generates qualifying income, you may also deduct health insurance premiums you pay for yourself and your family through the self-employed health insurance deduction on Schedule 1.8Internal Revenue Service. Instructions for Form 7206 – Self-Employed Health Insurance Deduction You can’t claim it for any month when you’re eligible for a subsidized health plan through your department, so it typically only helps officers whose department plan doesn’t cover them or their dependents for part of the year.
Line-of-Duty Injury and Survivor Benefits
Officers injured on the job should know that several categories of payments are entirely tax-free. Workers’ compensation benefits for personal injuries or sickness are excluded from gross income under federal law.9Office of the Law Revision Counsel. 26 U.S. Code 104 – Compensation for Injuries or Sickness Damages received on account of physical injuries, whether through a settlement or lawsuit, are also excluded, as long as they aren’t punitive damages.
Survivor benefits paid under the Public Safety Officers’ Benefits Act, or comparable state programs for dependents of officers killed in the line of duty, are excluded from the surviving family’s gross income. Disability income attributable to injuries from a terrorist or military action is also excluded. These exclusions apply automatically without any special election, but they still have to be reported correctly. An officer who receives a lump-sum settlement for a line-of-duty injury and mistakenly treats it as taxable income has overpaid, sometimes by thousands of dollars.
Why Reimbursement Structure Matters Now
With the federal deduction gone, the tax treatment of department reimbursements matters more than it used to. Reimbursements made under an accountable plan are tax-free and don’t appear as income on your W-2. To qualify as accountable, the plan must meet three conditions: each expense must have a business connection to your job, you must substantiate it with receipts or records, and you must return any amount that exceeds your actual costs.10eCFR. 26 CFR 1.62-2 – Reimbursements and Other Expense Allowance Arrangements
If any of those three conditions is missing, the arrangement is a non-accountable plan, and the entire reimbursement is treated as taxable wages on your W-2. You get the money back but owe income and payroll taxes on it. A flat uniform allowance that doesn’t require receipts is almost certainly taxable. The difference between the two plan structures can mean hundreds of dollars in taxes on the same reimbursement, which is worth raising with your union or department.
State Deductions That Still Exist
Many states never adopted the TCJA’s elimination of unreimbursed employee expenses. In those states, you can still deduct out-of-pocket costs for uniforms, dry cleaning, union dues, gear, training, and mileage on your state return. The list of non-conforming states shifts as legislatures update their codes, but as of recent years, a significant number of states — including several large ones — still allow the deduction.
The process typically mirrors the old federal system. You’ll complete a state worksheet similar to the former federal Form 2106, listing unreimbursed expenses and reducing them by any reimbursements received. For an officer spending $1,500 or more out of pocket annually on uniforms, gear, and professional costs, the state deduction can be worth $100 to $200 in reduced state taxes, depending on the rate.
That’s why record-keeping still matters. Save receipts for work-related purchases. Track mileage for driving your department doesn’t reimburse. Keep a log of union dues, training costs, and equipment purchases. Those records won’t help you federally, but they directly support state deductions and are essential if the state audits your return.