The CARES Act extends the traditional ability of employers to exclude payments on behalf of an employee for educational expenses of up to $5,250 per year to include the repayment of employee student loans. In both cases, payments are deductible to the employer while excluded from the gross income of the employees. Student loan payments may not exceed $5,250 per employee and made before January 1, 2021. When an employer makes a payment on a student loan on behalf of an employee that employee may not deduct any student loan interest paid in the year of the payment.
Tax-excluded Education Payments by an Employer Temporarily Include Student Loan Repayments
by Steven J Weil, PhD, EA, LCAM | May 6, 2020 | Blog, Business Tax, Covid-19, Personal Tax