IRS Reminds Employers to Use Educational Assistance Programs for Student Loan Payments Until 2025, IR-2024-227

The IRS has reminded employers that educational assistance programs can be used to help employees pay off student loans until December 31, 2025. This option, available since March 27, 2020, allows funds from these programs to cover both the principal and interest on qualified student loans. Traditionally used for expenses like tuition and books, these programs now offer tax-free benefits up to $5,250 per employee annually, covering federal income, Social Security, Medicare, and federal employment taxes. Amounts above this limit are taxable. Employers without such programs may consider establishing them, as they can attract and retain talent. The programs must be in writing and nondiscriminatory. For more details, employers can refer to IRS publications, including Publication 15-B and Chapter 10 of Publication 970.

IR-2024-227