As many of you know, The CARES Act from March 2020, made employer contributions to student loans tax-free by including student loan repayment benefits into Section 127 Educational Assistance Benefits.
This has created the opportunity for more employers to offer a student loan repayment benefit and employees to receive greater financial value from these benefits.
Originally the CARES Act provision was slated to expire on January 1, 2021. BenefitEd has reviewed the text from the newest COVID Relief and Omnibus Spending bill and is pleased to report that the tax benefit for student loan repayment benefits has been extended for five additional years!
Our expectation is that student loan benefits will eventually become a permanent part of Section 127. This extension gives employers confidence in the permanency of this tax benefit and will provide the stability many employers need to launch a student loan benefit.
BenefitEd is excited to work with new clients in 2021, to administer all Section 127 benefits, including student loan repayment benefits and tuition assistance benefits.
If you have more questions about the CARES Act or tax-free employer contributions, contact us.