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Bill Proposed to Make Employer-Paid Education Aid Tax Break Permanent

Under Section 127 of the Internal Revenue Code, employers can reimburse employees for up to $5,250 in annual undergraduate and graduate costs without the reimbursement being included in employees' taxable income.

March 6, 2012
Related Topics: Finance/Taxes, HR Services and Administration, Labor Trends, Employee Relations, Educational Assistance, HR & Business Administration, Benefits, Latest News
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The tax-favored status of employer-paid educational assistance benefits would be made permanent under bipartisan legislation introduced in the House of Representatives on March 5.

Under Section 127 of the Internal Revenue Code, employers can reimburse employees for up to $5,250 in annual undergraduate and graduate costs without the reimbursement being included in employees' taxable income.

That tax break, though, is set to expire on Dec. 31, 2012. The bill, H.R. 4137, introduced by Reps. Sam Johnson, R-Texas, and Richard Neal, D-Massachusetts, would make the tax break permanent.

"It's time to make education assistance a permanent benefit that workers and employers can count on," Kathleen Coulombe, senior associate in government affairs at the Society of Human Resources Management in Alexandria, Virginia, said in a statement.

Jerry Geisel writes for Business Insurance, a sister publication of Workforce Management. To comment, email editors@workforce.com.

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