Helping employees repay their student loans can be a game changer for retaining staff and recruiting new employees. Thanks to the CARES Act, a tax incentive is helping more employers do that through 2025.
Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020, which offered a tax incentive for employers to help their employees with student loan repayment. The new stimulus bill signed on December 21, 2020 extends the ability for employers to make tax-free student loan repayment contributions for employees until 2025. As with other forms of employer-provided educational assistance previously included in the law, the amount of the payments is capped at $5,250 per year per employee, and is excluded from the employee's taxable income.
“This is a significant benefit that businesses can offer employees, potentially helping retain staff and also as a valuable tool to recruit new employees,” said Secretary Schulz. “As we have done since this pandemic began, we want to make sure that Maryland businesses are aware of the many benefits of the CARES Act and other federal relief programs.”
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