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Employer Tuition Assistance Exemption on GOP Tax-Reform Chopping Block

SHRM descends upon Capitol Hill to advocate against the elimination of a tax exclusion for employer-based tuition assistance.

More than 400 members of the Society for Human Resource Management went to Capitol Hill on Nov. 16 to push changes in the employer-sponsored benefits portion of the Republican tax-reform plan. Currently, employers can provide up to $5,250 of tax-free tuition assistance to employees every year. That tax exclusion could be cut if the plan passes.

Republican tax reform

The Republican tax overhaul bill in Congress would eliminate tax-free tuition assistance to employees.

The skills gap is affecting businesses across the country, and many turn to community colleges and universities to help train talent. According to one estimate, 65 percent of all jobs will require an associate or bachelor’s degree or other form of education beyond high school by 2020. Cutting the tax exclusion could mean fewer employers are able to offer tuition assistance to employees.

“Providing tuition reimbursement allows many employees to pursue health care careers and, in turn, enables them to purchase homes, provide for their families and give back to their communities through their work,” Lori Hoekstra, HR manager for compensation and benefits at Riverside Medical Center in Kankakee, Illinois, said in a SHRM press release.

According to the statement, members of the 285,000-member HR advocacy association are concerned with other tax exclusions proposed in both the U.S. House and Senate versions of the tax plan as well. Other tax exclusions would include adoption assistance, moving expenses, transportation, meals, biking subsidies and employee achievement awards.

ATD, the Association for Talent Development, also weighed in on the possibility of a cut.

“The Association for Talent Development supports keeping the tax exemption for employer tuition assistance,” said Kristen Fyfe-Mills, the associate director of communications at ATD.

While in Washington, SHRM members will also be advocating for the Workflex in the 21st Century Act, which would provide employee benefits including expanded paid leave for full- and part-time workers and flexible work options.

Ave Rio is the associate editor for Chief Learning Officer, the sister publication of Workforce. Comment below or email editors@workforce.com.