Are you paying off your student loan? If so, the CARES Act has a little secret for you. The tax-free provision in section 2206 of this law can reduce your taxes by up to $5,250 every year if certain conditions are met!
All employees who have outstanding education debt and work at companies that provide assistance programs may qualify. The output is similar to the input but there are some differences.
Although many people are unaware of the CARES Act, it is an important piece in helping to reduce student loan debt. Section 2206 creates a temporary tax-free provision for employer student loan assistance programs.
The employer can give up to $5,250 in student loan payments for an employee either directly or through the servicer tax-free. This money is tax-free and considered a payroll exclusion since it doesn’t have to be included as income on their taxes.
In the years following the Student Debt Crisis, only 8% of companies offered to pay back student loans before being required by law. However, many CEOs have stressed how important it is that their company offers repayment incentives.
Furthermore, Walmart is taking action to make education more affordable for its employees by committing nearly $1 billion over the next five years in training and development. Walmart will pay 100% of college tuition and books through their Live Better U program which includes career-driven courses, such as computer science degrees or nursing certifications.
