BUFFALO, N.Y., March 31, 2020 /PRNewswire-PRWeb/ -- Signed into law on Friday, March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (H.R. 748, "CARES Act", or "Stimulus Bill"), includes tax incentives when employers choose to offer student loan repayment as a benefit.
Until at least January 1, 2021, companies can now provide pre-tax student loan contributions that directly reduce employees' student debt. Prior to the CARES Act, employer-sponsored Student Loan Repayment functioned as a taxable benefit, requiring the employer to pay payroll taxes and to withhold income taxes for employees.
Text previously drafted in the Employer Participation in Repayment Act (H.R. 1043/S. 460) is included in Section 2206 of the Stimulus Bill and allows employers to contribute up to $5,250 in pre-tax dollars annually towards employees' student loans under a Section 127 plan.
Student debt is a burden that affects more than 45 million college-educated Americans. As we enter a time of increased economic hardship brought on by the global coronavirus pandemic, this burden becomes even more crippling. And in many industries, the immediate need for college-educated workers -- including nurses, pharmacists, facility managers, and others -- has become more dire.
"Employer-sponsored Student Loan Repayment has always been a smart way to align interests between taxpayers, employers and student loan borrowers," Peanut Butter CEO David Aronson said. "And in the midst of the coronavirus pandemic, it will provide an attractive incentive for Americans to work our way forward, together."
Top employers in every industry are already offering Student Loan Assistance to attract, retain and engage talent, and it's likely that the number of employers offering the benefit will grow exponentially now that company contributions have become more tax-efficient for everyone involved.
Peanut Butter is a benefits administration firm built from the ground-up to help employers attract, retain and engage college-educated talent by providing Student Loan Assistance. To find out more and begin offering Student Loan Assistance today, visit getpeanutbutter.com.
SOURCE Peanut Butter, Inc.
Share this article