Tax Tip 2023-114:Reminder: Educational assistance programs can to help pay workers? student loans

IRS Tax Tips

September 25, 2023

Issue Number:??Tax Tip 2023-114

Reminder: Educational assistance programs can?help pay workers? student loans

Employers that offer educational assistance programs can also use those programs to help pay their employees? student loans.

Though educational assistance programs have been available for many years, the option to use them to pay student loans is available only for payments made after March 27, 2020. Under current law, this option will be available until Dec. 31, 2025.

Traditionally, educational assistance programs have been used to pay for books, equipment, supplies, fees, tuition and other education expenses for the employee. These programs can now also be used to pay principal and interest on an employee?s qualified education loans. Payments made directly to the lender, as well as those made to the employee, qualify. By law, tax-free benefits under an educational assistance program are limited to $5,250 per employee per year. Normally, assistance provided above that level is taxable as wages.?

For information on other requirements, see Publication 15-B, Employer?s Tax Guide to Fringe Benefits. Chapter 10 in Publication 970, Tax Benefits for Education provides details on what qualifies as a student loan.

?? ?? ?

Thank you for subscribing to IRS Tax Tips, an IRS e-mail service. For more information on federal taxes please visit IRS.gov.

This message was distributed automatically from the IRS Tax Tips mailing list. Please Do Not Reply To This Message.

Update your subscriptions, modify your password or email address, or stop subscriptions at any time on your Subscriber Preferences Page. You will need to use your email address to log in. If you have questions or problems with the subscription service, please contact subscriberhelp.govdelivery.com.

This service is provided to you at no charge by the Internal Revenue Service (IRS).

This email was sent to [email protected] by: Internal Revenue Service (IRS) ? Internal Revenue Service ? 1111 Constitution Ave. N.W. ? Washington DC 20535

Useful Links:

News Essentials

The Newsroom Topics

IRS Resources

Issue Number:??Tax Tip 2023-114