Has anyone come up with a way to handle the taxability of student loan repayments offered under the 2020 Cares Act allowing up to $5250.00 per year tax-free for the employee. We are currently offering an undergraduate student loan repayment benefit of up to $800/month. Payments are actually made by a 3rd party who verifies loans with the loan servicers and issues payments directly to the loan servicers on behalf of the employee/student.
We know that we need to impute the amounts paid on the employees' behalf once they cross the $5250.00 annual limit. If you want to add a bit more complexity, the $5250 limit is shared with the Tuition Reimbursement benefit, which we track in-house and pay via Infor Lawson Payroll.
We are running v10 Service Pack 11 On Prem.
The Student Loan Repayment Benefit is relatively new for us and we have only had 1 employee cross the $5250 threshold so far. However, there are a number of others that will cross this limit in the coming months, so we would like to see if others have identified a way to track the taxability for Student Loan Repayment and Tuition Reimbursement Benefits in the system.
Thanks,
John “Jay” W. Nash III
Sr. Systems Analyst, Finance and Administrative Services
VHC Health
2800 S. Shirlington Road, Suite 200
Arlington, VA 22206
Email jnash@vhchealth.org
