The IRS recently issued frequently asked questions (FAQs) in FS-2024-22 related to educational assistance programs under Section 127. Generally, taxpayers may exclude certain educational assistance benefits from their gross income if they are provided under an educational assistance program.
Educational assistance benefits may include payments for tuition, fees and similar expenses, books, supplies and equipment. They also include principal or interest payments on qualified education loans made by the employer after March 27, 2020, and before Jan. 1, 2026 (unless extended by future legislation).
The FAQs in FS-2024-22 address the following aspects of educational assistance programs:
- General aspects of an educational assistance program
- Qualified education loans
- Student debt reimbursements
- Eligibility for self-employed individuals, shareholders, and owners
- Other exclusions for educational assistance
Taxpayers may exclude the amount of benefits up to $5,250 from income per calendar year and their employer should not include the benefits in their wages, tips and other compensation shown in Box 1 of their Forms W-2. Amounts paid under an educational assistance program are generally deductible by the employer as a business expense under Section 162.
Contacts:
More tax hot topics
No Results Found. Please search again using different keywords and/or filters.
Share with your network
Share