Congress extends tax exemption for repayment of Goodly’s employer sponsored student loan
SAN FRANCISCO – (COMMERCIAL THREAD) – Well, a leading administrator of student loan repayment benefits, today applauded Congress for granting a five-year extension to a temporary tax exemption that allows employers to pay up to $ 5,250 per year for the student debt of each employee tax-free.
Similar to a 401 (k) correspondence, the provision allows employers to help pay off their employees’ student loan debt without employer contributions being taxed. Initially included in the framework of the CARES law, this tax exemption was due to expire on December 31, 2020. Lawmakers have now extended this deadline until December 31, 2025 with the adoption of the new economic stimulus bill.
“Repaying employer sponsored student loans is one of the most important and innovative benefits employers can offer,” said Gregory Poulin, CEO of Goodly. “Allowing employers to repay their employees’ student loans on a pre-tax basis is a win-win solution. Since the enactment of this law, we have seen a significant increase in demand from employers seeking to implement student loan repayment as a benefit program. Thanks to the employer’s pre-tax payments, the average employee who uses Goodly can pay off their student loans about 30% faster than they would otherwise, demonstrating the power of this legislation and the benefits of student loans in their whole. ”
The newly enacted law will extend tax relief for student loan repayment programs by 5 years. Prior to the passage of the CARES Act, employees and employers were subject to tax obligations when participating in employer-funded student loan repayment benefits. Since the enactment of the CARES Act, employers can make tax-free contributions of up to $ 5,250 per employee per year for employee student debt without increasing the employee’s gross taxable income.
Goodly is a leading provider of employer sponsored contributions to student loans and to 529 university savings plan accounts. Similar to a 401 (k) match, Goodly’s turnkey solution provides employers with a single platform to automate regular contributions to pay off employee student loans on a pre-tax basis. Companies that offer Goodly are able to better attract and retain top talent by delivering meaningful benefits that support and engage employees. For more information, please visit www.goodlyapp.com or follow Goodly on LinkedIn.
