Details of Public Law 116-260, section 120 , Exclusion for Certain Employer Payments of Student Loans

Section 2202 of the Coronavirus, Aid, Relief, and Economic Security Act (CARES Act), enables employers to provide a student loan repayment benefit to employees on a tax-free basis. Under the provision, an employer may contribute up to $5,250 annually toward payment of an employee’s student loans, and such payment would be excluded from the employee’s income. The $5,250 cap applies to both the new student loan repayment benefit as well as other educational assistance (e.g., tuition, fees, books) provided by the employer under current law. The CARES Act provision applies to any student loan payments made by an employer on behalf of an employee after date of enactment and before 1/1/2021.

The provision extends the CARES Act exclusion by making it applicable to payments made by an employer on behalf of an employee before 1/1/2026.

20/21 21/22 22/23 23/24 N/A $ (48,000,000) $ (31,000,000) $ (33,000,000)