Employer Tip - Educational Assistance Programs - New IRS FAQs

Educational Assistance Programs – New IRS FAQs

The IRS released a set of FAQs that do not appear to make any changes, but simply clarify the tax-favored reimbursement available via educational assistance programs offered by employers to employees.

Code §127 permits employers to reimburse employees for payments for tuition, fees and similar expenses, books, supplies and equipment. Through the end of 2025 (unless extended further by legislation), employers may also reimburse employees for principal or interest payments on qualified education loans. Such reimbursements may be excluded from employees’ taxable income up to $5,250 per calendar year.

Further detail on this program is available in the IRS Frequently Asked Questions document.

Sample IRS Educational Assistance Program Plan Document

^{While every effort has been taken in compiling this information to ensure that its contents are totally accurate, neither the publisher nor the author can accept liability for any inaccuracies or changed circumstances of any information herein or for the consequences of any reliance placed upon it. This publication is distributed on the understanding that the publisher is not engaged in rendering legal, accounting, or other professional advice or services. Readers should always seek professional advice before entering into any commitments.}