Educational assistance programs can be used to help pay student loans
September 7, 2023
The IRS has issued a reminder that employers can use educational assistance programs to help employees pay off their student loans. Emphasis is being placed on the flexibility of these programs to cover not only tuition but also student loan payments. Employers can contribute up to $5,250 annually tax-free per employee, and employees can benefit from this assistance without including it in their taxable income. Though educational assistance programs have been available for many years, the option to use them to pay student loans has been available only for payments made after March 27, 2020, and, under current law, will continue to be available until Dec. 31, 2025. This initiative aims to alleviate the burden of student debt and promote employer-sponsored educational support as a valuable benefit.
As part of a wider effort to promote this benefit the IRS will hold a free webinar on September 14th to help interested taxpayers and tax professionals better understand this special provision.
Find more information about this provision and register for the IRS webinar using the links below. And reach out to our team with any questions.