The bottom of the first page and the second page of the RAS has various areas for deductions, including the items mentioned below. One thing on the RAS that is pre-tax is the deduction for Survivor Benefit Program (SBP) Coverage. This is a deduction from the retiree’s pay that is set aside for the surviving spouse to receive after the retiree’s death. It is pre-tax because it is taxable to the surviving spouse.
The middle of the second page has a spot for Former Spouse Protection Act Deductions. This is a tricky area because it is not straightforward. In most cases, the amount is not included in the taxable income on page one, nor is it included on the 1099R since the former spouse receives a 1099R of their own. But, in some older divorces and divorces which occur in non-community property states this amount may be included in the taxable income, and should be deducted from the retiree’s income as alimony. If the Former Spouse deduction is taxable to the retiree it will not show in the Pay Item Description box under Gross Pay. This is the case where you would show an adjustment for alimony on the retiree’s 1040. The way this is reported changed several years ago, and some retirees Read more