Up to $5,250 in Student Loan Payments: IRS Pressured To Promote

Through 2025, companies are permitted to make tax-free student loan payments of up to $5,250 to their employees under the Employer Participation in Repayment Act. U.S. Senators John Thune of South Dakota and Mark R. Warner of Virginia are urging the IRS to promote educational assistance programs more effectively in order to lessen the burden of student loan payments on Americans.

Up to $5,250 in Student Loan Payments: IRS Pressured To Promote
Up to $5,250 in Student Loan Payments: IRS Pressured To Promote

Up to $5,250 in Student Loan Payments

The Internal Revenue Service (IRS) is being pushed by U.S. Senators Mark R. Warner (D-VA) and John Thune (R-SD) to better promote educational assistance programs that would lessen the burden of student loan payments. The senators are particularly focusing on initiatives to spread awareness of their Employer Participation in Repayment Act, which permits companies to make up to $5,250 tax-free contributions to employees’ student loan debt.

The senators asked the IRS to do a number of things in order to properly advertise these programs and guarantee that employers and workers are fully aware of the advantages available to them, including: The IRS conducts webinars on employer-sponsored educational assistance student loan payments programs and publishes them; In order to assist employers looking to profit from section 127 benefits, the IRS regularly publishes updated and useful resources; Additionally, the IRS informs both employers and employees of the enhanced section 127 benefits and additional resources, including, but not limited to, by sending out IRS e-newsletters to business owners.

This section 127 provision benefits both employers and employees since it gives borrowers a method to reduce their student loan debt while giving employers another way to find and keep the talent they need to expand their company.

IRS is Being Questioned

Sen. Warner questioned IRS Commissioner Danny Werfel on the agency’s outreach initiatives relating to perks available to borrowers in April of this year. During the conversation, Commissioner Werfel promised to make a considerable effort to inform taxpayers of these benefits. Although these programs would significantly lessen the burden of monthly payments for borrowers and help employers retain competent workers, little progress has been achieved since then in educating employers and employees about them.

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