Tax-Free Is the Way to Be! The Consolidated Appropriations Act, 2021 Extends Employment Tuition Repayment Assistance Through 2025
Here’s a tax legislation win-win!
If you have student loans, your employer now has the opportunity to provide repayment assistance through 2025 tax-free. Let’s say that again: tax-free!
An article published by SHRM explains: “The Consolidated Appropriations Act, 2021 (CAA), signed into law by President Donald Trump on Dec. 27 extends for five years COVID-19 relief that allows employer-provided student loan repayment as a tax-free benefit to employees under Section 127 of the Internal Revenue Code. Through 2025, employers can continue to make contributions of up to $5,250 per employee annually toward eligible education expenses, like tuition or student loan assistance, without raising the employee's gross taxable income.”
SHRM calculates that only 8% of employers provide loan assistance. This legislation aims to improve that number to make a dent in our nation’s student loan debt crisis.
Chatrane Birbal, vice president for public policy at SHRM said, "This benefit will provide some relief to employees who are currently repaying student loan debt and also gives employers more flexibility in the design of benefit offerings for recruitment and retention purposes."
Let’s spread the word and keep our fingers crossed that more employers recognize the win-win benefits of offering tuition repayment assistance now, through 2025 and beyond.
Welcome to the Blue Fox Blog! A fairly entertaining source of info and news related to our company, nonprofits, social sector trends, and, of course, accounting. Enjoy!
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