Tips & Tricks

Educational Assistance Program

Hi there.

A few years ago I wrote this poem called Student Loans Suck. And it was a hit. And by hit I mean maybe 16 people listened to it. Since the pandemic, they got paused and no one talked about them. But, now they’re back. Here’s an idea to help staff tackle them. In today's competitive job market, employers are constantly seeking innovative ways to attract and retain top talent. One such avenue that has gained traction is assisting employees with their student loan repayments. The IRS has provisions in place that make this not only feasible but also beneficial for both employers and employees.

Educational Assistance Programs: A Brief Overview

The IRS allows employers to offer up to $5,250 annually in tax-free educational assistance to their employees under Section 127 of the Internal Revenue Code. This means that employers can contribute towards their employees' tuition fees, books, and other educational expenses, including student loan repayments, without the employee incurring any additional taxable income.

Benefits for Employers:

Tax Deductions: Contributions made under the educational assistance program are tax-deductible for the employer.

Enhanced Employee Retention: Offering student loan repayment assistance can be a significant incentive for employees to stay with the company.

Attracting Top Talent: As student loan debt continues to be a pressing concern for many, this benefit can set a company apart in the eyes of potential hires.

Benefits for Employees:

Tax-Free Assistance: The contributions made by the employer towards the student loan do not count as taxable income for the employee.

Financial Relief: With the average student loan debt in the U.S. being substantial, this assistance can provide significant financial relief to employees.

Increased Job Satisfaction: Knowing that an employer is invested in their financial well-being can boost morale and job satisfaction.

In conclusion, the IRS's educational assistance programs present a win-win scenario. Employers can leverage this to enhance their employee benefits package, while employees can enjoy some relief from their student loan burdens. If you're considering implementing this in your organization or need further information, please reach out to us.

Drop us a message and see how we can help you!

“We leverage leading practices and disruptive technology to do more than just balance the books. We're actually building the business. And that's our edge.”
Robert L Whittley CPA
CEO & Founder

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