Which have passing of the brand new COVID-19 stimulus costs inside December, Congress offered good four-seasons extension to a short-term provision of your own CARES Act one lets companies to contribute to $5,250 a-year towards for each employee’s beginner loans toward an income tax-free foundation.
That it income tax difference was set-to expire into . Congress has now offered one to deadline due to . The brand new laws and regulations allows companies to assist pay down its employees’ pupil financing debt in place of manager benefits are taxed, the same as an effective 401(k) matches.
Government, personal and you may refinanced student education loans all are qualified to receive pre-taxation manager efforts
Making use of it benefit, each other businesses and professionals avoid government payroll and you will income taxes towards company repayments in order to dominant or notice to your an experienced student loan, that’s recognized as a student-based loan throughout the term out of the new personnel and you will employed for the degree. So it income tax exception, but not, does not connect with knowledge money for a keen employee’s partner, college students, or any other dependents.
Addressing student financial obligation at work has been a burgeoning trend in employee benefits in recent years. Even prior to this tax exemption, the number of employers offering student loan repayment benefits doubled from 4% to 8% of U.S. [Read more…]