By Jeff Chang
Many of the public agencies we work with have expressed a strong interest in programs and arrangements that will help or encourage their employees to pay off their student loan debts. These programs can be important recruiting, retention and collective bargaining tools for employers. Frankly, under existing tax law, there are few — if any — ways for an employer to “help” its employees with the repayment of student debt incurred prior to employment on a nontaxable basis. This is because practically all “employer-made” payments for or on behalf of an employee will be considered taxable, unless a specific statutory exclusion from income is available. As a result, if an employer helps an employee repay his or her student loan by directly or indirectly paying the lender, this will generally be considered additional taxable income to the employee. Continue reading