Specifically, the provision allows employers to contribute to the repayment of the student’s loan to the employee without the employer’s contributions being taxed. Employers can contribute up to $ 5,250 as a tax-deductible business expense and employer contributions are excluded from liability for employees’ personal income tax.
To take advantage of this new tax benefit, employers can use a service such as the Gift of College At-Work platform, which streamlines the process for employees to contribute to student loan accounts through deduction from the payroll and for employers to match or contribute to those accounts as well. The platform works for employee and employer contributions to 529 college savings and ABLE accounts as well. Adding this kind of high-demand benefit can also make employers more attractive to high-caliber industry talent – financial well-being benefits are among the main benefits requested by many employees and studies show that 86% of employees would commit to an employer for five years in exchange for help with their student loans.
“Employers can play a critical role in solving one of the most challenging economic crises of our time – student loan debt,” says Wayne Weber, founder and CEO of Gift of College. “Reimbursement assistance is a victory for millions of Americans who have student loan debt and a victory for employers who can receive valuable tax benefits in the process.”
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Download more information to enjoy Gift of College At-Work payroll deduction and employer contribution platform here.
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SOURCE College gift