Today, on September 14th of 2023, we attended the IRS-hosted webinar ‘Qualified Education Assistance Programs’, which focused on education and compliance surrounding tax-free educational assistance benefits. The webinar was called for by U.S. Senators Mark Warner (D-VA) and John Thune (R-SD) to provide further transparency to employers looking to offer Student Loan Assistance programs.
During the presentation, the IRS covered compliance considerations for offering tax-free Student Loan Repayment plans under section 127. Specifically, each plan must:
- Have a documented plan maintained by the employer,
- Provide employees with notification on the terms of the benefit,
- Not discriminate in favor of highly compensated employees or shareholders,
- Not be a presented choice between educational assistance or other benefits/forms of compensation,
- Only contribute to student loans that were taken out for the employee’s own education.
A recording of the IRS webinar is available on the IRS website. While Peanut Butter cannot provide tax or legal guidance to employers, we make exceptional efforts to track best practices. Our Briefing on Tax-free Student Loan Repayment covers these best practices and more.