Take Advantage of a Current Federal Law to Help Attract New Employees!

January 31, 2024

Just two more years!

Every little bit helps in the fight to attract and retain talent, especially with today’s staffing shortages. A current federal law makes it more affordable to offer a benefit to entice recruits, called the Employer Participation in Repayment Act.

Under this law, employers can offer tax-free student loan repayment benefits to their employees of up to an annual maximum of $5,250 per year through the year 2025.

This benefit is tax deductible for employers and is excluded from taxable income for employees. Prior to this legislation, if an employer wanted to offer student loan assistance as a benefit, those payments would be included in an employee’s taxable income.

The maximum of $5,250 per year is identical to what is already permitted for tuition assistance benefits under the Internal Revenue Code.

The student loan being paid must be that of the employee, not of the employee’s child or spouse.

To learn more, access the Employer's Tax Guide to Fringe Benefits, which offers guidance by the Internal Revenue Service on how this tuition program can be implemented for 2024.