Student Loans

The CARES Act provides an exclusion of up to $5,250 from income for payments of an employee’s education loans. In order for the exclusion to apply, the loan must have been incurred by the employee for the education of the employee (for example: the loan must not have been incurred to pay for the education of the employee’s child). The $5,250 cap applies to both the new student loan repayment benefit as well as other educational assistance (tuition, fees, books, etc) provided by the employee.

The payment can be made to the employee or directly to the lender. The exclusion only applies for payments made by an employer after the date of enactment and before January 1, 2021.