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<< Older News  |  March 1, 2021

News

All News > Educational Assistance Benefits

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2021 Employee Benefit Plan Opportunities for Employer Consideration
Jackson Lewis P.C. Link to more items from this source
Feb. 18, 2021

"[1] Student loan repayment by employer under an educational assistance program.... [2] Student loan repayment by employee under a 529 plan.... [3] Carryover of health and dependent care flexible spending account (FSA) amounts ... [4] Setting up a 401(k) plan and obtaining a tax credit for doing so.... [5] Penalty-free withdrawals from 401(k) plan to pay for birth or adoption of a child."

Tags: 401(k) Plans  •  Dependent Care  •  Educational Assistance Benefits  •  Health Plan Design

Under the HEROES Act, Employers Can Help Pay Your Student Loans
Epstein Becker Green Link to more items from this source
[Guidance Overview]
Jan. 18, 2021

"The HEROES Act extends student loan assistance under IRC Section 127 for five years.... [E]mployers may now pay employees up to $5,250 per year towards qualified educational expenses, student loan repayments (both principal and interest), or a combination of both -- tax free -- until December 31, 2025."

Tags: Coronavirus (COVID-19)  •  Educational Assistance Benefits

Consolidated Appropriations Act Extends Incentive for Employer-Provided Student Loan Relief
Graydon Link to more items from this source
[Guidance Overview]
Dec. 29, 2020

"The CARES Act provided a temporary provision that enabled employers to provide tax-advantaged benefits until January 1, 2021, and now this provision has been extended by the Consolidated Appropriations Act for five more years.... The CARES Act changed the definition of 'educational assistance' to include payments made by the employer to an employee before January 1, 2021 for principal and/or interest on qualified education loans incurred by the employees. In short, employers could provide a student loan repayment benefit of $5,250 to employees tax-free for 2020 through an education assistance program."

Tags: CARES Act  •  Consolidated Appropriations Act, 2021   •  Educational Assistance Benefits

Is Student Loan Debt a Barrier to Saving for Retirement?
T. Rowe Price Link to more items from this source
Dec. 15, 2020

"Plan sponsors have an opportunity to better align their savings and benefit programs to the financial needs of their employees. The hope is that employees can take advantage of resources that can help them better organize their financial priorities in order to achieve greater financial well‑being and retirement readiness."

Tags: Educational Assistance Benefits  •  Retirement Plan Design

IRS Allows Tax-Advantaged Leave Donation to COVID-19 Relief Organizations
Verrill Dana LLP Link to more items from this source
[Guidance Overview]
June 30, 2020

"Notice 2020-46 provides that employees who forgo paid time off in exchange for tax deductible employer contributions made before January 1, 2021, to a charitable organization for the relief of victims of COVID-19 will not be taxed on the value of the donated leave. The employer may still deduct the contribution, but the employee may not take a charitable deduction."

Tags: Coronavirus (COVID-19)  •  Educational Assistance Benefits

Employer Student Loan Tax Benefit in the CARES Act
Findley Link to more items from this source
June 29, 2020

"Employees with student loans have been able to claim a deduction for interest paid up to $2,500. The CARES Act prevents employees from claiming this deduction and the $5,250 exclusion from their gross income. In a sense, they cannot 'double dip'."

Tags: CARES Act  •  Coronavirus (COVID-19)  •  Educational Assistance Benefits

How to Provide Employees Up to $5,250 in Nontaxable Student Loan Repayment Assistance This Year
Bradley Link to more items from this source
[Guidance Overview]
June 12, 2020

"Under the [CARES] Act, employers can now make nontaxable payments of up to $5,250 to employees as student loan repayment assistance, but only if the payments are made by December 31, 2020, under an educational assistance program that meets the requirements of Internal Revenue Code Section 127. By utilizing such a program, both employers and employees will avoid federal payroll taxes on qualifying payments, and employees will save on federal income taxes that would otherwise apply."

Tags: CARES Act  •  Coronavirus (COVID-19)  •  Educational Assistance Benefits

CARES Act Authorizes Limited Employer Repayment of Student Loans
Best Best & Krieger LLP Link to more items from this source
[Guidance Overview]
May 28, 2020

"This limited-time benefit, which is only available during 2020, can be a win-win for employers and employees because it is not taxable to the employee and it is not counted for payroll tax purposes for public agencies that do not contribute to Social Security.... [This] provision of the Act allows employers to pay or reimburse any 'qualified education loan' ... up to $5,250 during the remainder of 2020 under an educational assistance program."

Tags: CARES Act  •  Coronavirus (COVID-19)  •  Educational Assistance Benefits

Educational Assistance Programs Allow Employers to Pay Their Employees' Student Loans with Pre-tax Dollars (PDF)
Boutwell Fay LLP Link to more items from this source
[Guidance Overview]
May 4, 2020

"Not all student loan payments qualify. [1] The statute requires that the payments must be made by the employer on or after the date of enactment (March 27, 2020) and before January 1, 2021. [2] The loan with respect to which the payments are made must have been incurred by the employee for the employee's education. Loans taken out by a parent of the employee will not qualify. Neither will a loan for the education of an employee's child. [3] An employer may choose to make loan payments directly to the lender or to reimburse the employee for payments already made by the employee."

Tags: CARES Act  •  Coronavirus (COVID-19)  •  Educational Assistance Benefits

CARES Act Expands Scope of Educational Assistance Plans to Include Employer Repayments of Student Loans
Hinshaw & Culbertson LLP Link to more items from this source
[Guidance Overview]
May 1, 2020

"The CARES Act expanded the scope of Educational Assistance Programs under Section 127 of the code to include student loan repayments. Under prior law, that provision only allowed for an exclusion from an employee's income for educational assistance that was provided by an employer prospectively.... [An] employer may now repay up to $5,250 of an employee's student loans, and those repayments would not be subject to income or payroll tax for 2020."

Tags: CARES Act  •  Coronavirus (COVID-19)  •  Educational Assistance Benefits

Temporary Expansion of Educational Assistance Programs to Cover Employees' Student Loan Debt
Dickinson Wright Link to more items from this source
Apr. 30, 2020

"Any payments for student loan debt would count against the $5,250 annual benefit under the educational assistance program. To implement this feature, an employer should amend its educational assistance program, or adopt a program, and notify employees of the availability of the new benefit."

Tags: Educational Assistance Benefits

Employer-Paid Student Loan Relief for 2020
Groom Law Group Link to more items from this source
[Guidance Overview]
Apr. 22, 2020

"The CARES Act relief permits an employer to amend its 127 plan to allow for the direct payment to the lender, or payment to the employee, to pay/reimburse principal and interest payments on a 'qualified education loan' incurred by the employee for education of the employee."

Tags: CARES Act  •  Coronavirus (COVID-19)  •  Educational Assistance Benefits

CARES Act Student Loan Benefits Can Aid Employees of Essential Businesses
E is for ERISA Link to more items from this source
[Guidance Overview]
Apr. 20, 2020

"[E]ssential businesses that are adding to payroll or are asking extraordinary efforts from their existing employees should consider making tax-advantaged payments towards employees' student loans through a new CARES Act measure made available from March 27, 2020 ... through the end of this calendar year. The CARES Act provision is not in any way limited to essential employers, but by necessity these may be the only employers who are in a financial and staffing position to give the measure serious consideration at this time."

Tags: CARES Act  •  Coronavirus (COVID-19)  •  Educational Assistance Benefits

CARES Act Provisions Affecting Welfare Benefit Plans
Stevens & Lee Link to more items from this source
[Guidance Overview]
Mar. 31, 2020

"[1] Over-the-counter drugs and medicines may be reimbursable from FSAs and HSAs ... [2] Employers can pay employees' student loans on a tax-free basis ... [3] COVID-19 testing and services must be provided without cost sharing ... [4] Telehealth ... [5] Out-of-network providers reimbursement."

Tags: CARES Act  •  Coronavirus (COVID-19)  •  Educational Assistance Benefits  •  Health Plan Design

Student Loan Relief Incentive Provided by CARES Act
Graydon Link to more items from this source
[Guidance Overview]
Mar. 30, 2020

"[E]mployers can now provide a student loan repayment benefit of $5,250 to employees tax-free for 2020 through an education assistance program.... [T]he relief is limited and for many employers it may not be feasible to incur additional benefit costs this year. Not only is this new benefit temporary, but to offer this benefit, the employer must have a formal education assistance program."

Tags: CARES Act  •  Coronavirus (COVID-19)  •  Educational Assistance Benefits

Employee Benefits Provisions of the CARES Act
McCarter & English Link to more items from this source
[Guidance Overview]
Mar. 30, 2020

"Key employee benefit plan-related provisions of the [CARES Act] include: [1] Temporary changes for retirement plans: including waiver of 10% penalty for early withdrawals and increase in loan limits for individuals affected by COVID-19; waiver of required minimum distributions in 2020; and extension of the contribution deadline for defined benefit plans. [2] Changes for group health plans: including flexible spending account plan coverage of over-the-counter medications; clarifications regarding high-deductible health plan (HDHP) deductibles and telehealth services; and coverage mandates for diagnostic testing and preventive services for COVID-19-related conditions. [3] Employer contributions of up to $5,250 toward repayment of an employee's student loan (for higher education) tax-free to the employee."

Tags: 401(k) Plans  •  CARES Act  •  Coronavirus (COVID-19)  •  Educational Assistance Benefits  •  Retirement Plan Administration

How the Stimulus Bill Would Impact Employee Benefit Plans
Ballard Spahr LLP Link to more items from this source
[Guidance Overview]
Mar. 27, 2020

"The CARES Act provides qualified individuals with a one-year extension to repay qualified retirement plan loans if the due date occurs between the enactment of the CARES Act and December 31, 2020.... For the period between the enactment of the CARES Act and January 1, 2021, employer payments of principal or interest on any qualified education loan of an employee will not be included in the gross income of that employee. These payments may be made to the employee or to a lender."

Tags: 401(k) Plans  •  CARES Act  •  Coronavirus (COVID-19)  •  Educational Assistance Benefits  •  Retirement Plan Administration

Workers Want Help with College Loans, Not 401(k)s
InvestmentNews; subscription may be required Link to more items from this source
Feb. 21, 2020

"Two-thirds of workers age 21 to 27 said their companies should help them pay down student loans, while just over a quarter, 27%, said employers should help workers save for retirement ... That sentiment isn't much different across age groups -- nearly 40% of all workers said that employers should help with student loan payments, while just 25% said the same for retirement plan contributions.... [P]eople who have low or no debt agreed with that nearly as much as those with high levels of debt[.]"

Tags: 401(k) Plans  •  Educational Assistance Benefits  •  Retirement Plan Design

Availability of Flexible Work Schedule and Student Loan Repayment Benefits as of June 2019
U.S. Bureau of Labor Statistics [BLS] Link to more items from this source
Feb. 19, 2020

"In June 2019, 3 percent of civilian workers (includes private industry, as well as state and local government workers) had access to student loan repayment and 11 percent had access to flexible work schedules."

Tags: Educational Assistance Benefits

DOL Releases Search Tool for Apprenticeship and Training Plan Notices
Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL] Link to more items from this source
[Official Guidance]
Jan. 13, 2020

EBSA has made available a new online tool which allows users to search and view Apprenticeship and Training Plan Notices filed with the Department of Labor (under 29 CFR 25230.104-22). Results can be printed or downloaded to Excel.

Tags: Educational Assistance Benefits

Student Loan Guidance Added to Treasury Priority Plan
National Tax-Deferred Savings Association [NTSA] Link to more items from this source
Oct. 15, 2019

"While the plan does not specify what the agencies are considering, the guidance – which could be issued in the first half of 2020 – improves the outlook for those interested in combining a student loan component with their retirement plans."

Tags: 401(k) Plans  •  Educational Assistance Benefits  •  Retirement Plan Design

Student Loan and Retirement Plan Guidance on IRS Priority List
Ascensus Link to more items from this source
Oct. 14, 2019

"Employers have individually requested IRS approval of benefit arrangements that link student loan repayment and retirement plans. There have been calls for the IRS to issue guidance that other employers could avail themselves of without seeking IRS guidance or approval individually."

Tags: 401(k) Plans  •  Educational Assistance Benefits  •  Retirement Plan Design

Employers Try a New Perk: Matching Student Loan Payments With 401(k) Contributions
The Wall Street Journal; subscription may be required Link to more items from this source
Oct. 10, 2019

"Eight percent of the 2,763 employers the Society for Human Resource Management surveyed in April offered assistance with student loans, up from 4% in 2018 and 3% in 2015. According to a survey of 250 companies last year by the Employee Benefit Research Institute, 11% of employers offered student-loan repayment subsidies and another 13% planned to add it."

Tags: 401(k) Plans  •  Educational Assistance Benefits  •  Retirement Plan Design

How to Ensure That Tuition Reimbursement Doesn't Break the Bank
International Foundation of Employee Benefit Plans [IFEBP] Link to more items from this source
Oct. 9, 2019

"[1] Consider a fixed annual dollar amount for reimbursement.... [2] Ensure that workers are attending classes that will directly improve their performance! ... [3] Use length-of-service requirements to determine eligibility ... [4] Make sure you are dedicating your dollars to high-performing employees by requiring the fulfillment of employee performance standards before course approval.... [5] Limit reimbursement to courses that lead to a degree ... [6] Use academic requirements for tuition reimbursement benefits.... [7] Implement payback provisions for workers who leave before their reimbursement requirements have been met."

Tags: Educational Assistance Benefits

Making Cents of Financial Wellness
OneDigital Health and Benefits Link to more items from this source
Sept. 25, 2019

"Offer solutions that support employees through all stages of their life and career. Consider offering small loan programs ... to prevent employees from borrowing against their 401k. Investigate the tax benefits for tuition assistance ... There are also non-traditional financial wellness benefits such as Health Savings Accounts (HSA) and parental leave benefits."

Tags: Educational Assistance Benefits  •  Misc. Benefits


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