With passage of the COVID-19 stimulus bill in December, Congress granted a five-year extension to a temporary provision of the CARES Act that allows employers to contribute up to $5,250 annually toward each employee’s student debt on a tax-free basis.
This tax exemption was set to expire on December 31, 2020. Congress has now extended that deadline through December 31, 2025. The legislation allows employers to help pay down their employees’ student loan debt without employer contributions being taxed, similar to a 401(k) match.
