Student Loan Debt Archives

The Business Benefit to Helping Your Employees Pay Off Their Student Loans

By Office Staff|2021-10-11T13:10:39-07:00October 11, 2021|Categories: Business Advice|Tags: CARES Act, Education Assistance Programs, Student Loan Debt|0 Comments

Thanks to the Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law on March 21, 2020, employers have a valuable new benefit they can offer to their employees — tax-free employer student loan assistance. And as you’ll see below, this benevolent act has tax advantages for your business.

According to the provision created by Section 2206 of the CARES Act, an employer can pay up to $5,250 in student loan payments for an employee each year, either to the student loan servicer or directly to the employee. Payments are tax-free for the employee, and the employer receives a payroll tax exclusion on that amount.

Originally intended to expire in 2020, the program has been extended through December 2025 under the Consolidated Appropriations Act (CAA), with those of us here at SWC believing it’s likely to be extended beyond 2025.

The Benefits of Helping Employees Pay Their Student Loans

As a business owner, you know that tax-free isn’t free. You pay for every benefit that you offer and that your employees take advantage of. The payroll tax exclusion slightly offsets the cost you incur, but employees benefit most in respect to the student loan relief and the fact that they don’t pay income tax on that compensation.

So, what’s in it for you? Consider the following potential benefits: Continue reading… Continue reading… Continue reading…

Understanding the American Rescue Plan Act of 2021

By Office Staff|2021-04-29T15:44:47-07:00April 29, 2021|Categories: COVID-19|Tags: American Rescue Plan Act of 2021, Child Tax Credits, Dependent Care Tax Credits, Paid Sick and Family Leave, Student Loan Debt, Unemployment Insurance|0 Comments

On March 11, 2021, the President signed into law the American Rescue Plan Act of 2021 (ARPA) — a $1.9 trillion stimulus package aimed at helping the nation rebound from the economic impact of the COVID-19 pandemic. The Act itself contains more than 600 pages and includes provisions addressing stimulus payments, unemployment benefits, healthcare, state and local funding, along with several tax law changes.

Most of the tax changes are geared toward individual taxpayers, but some affect businesses. In this post, we cover some of the highlights to help you gain a better understanding of the major tax provisions and answer questions you may have.

Getting the Maximum Qualified Stimulus Payment

The big news is the third round of stimulus payments — tax-free money from the federal government. Eligible taxpayers and their qualifying dependents may receive up to $1,400 each. Married couples could receive up to $2,800.

Fewer of us are likely to qualify for the stimulus payment this time around. That’s because the adjusted gross income (AGI) thresholds start at the same amounts, but the phase-out range is much narrower than with prior stimulus payments:

$150,000 to $160,000 AGI for joint filers, meaning stimulus payments are gradually reduced for joint filers earning a combined $150,000 AGI or more and are not granted to those earning more than $160,000.
$112,500 to $120,000 AGI for head of household.
$75,000 to $80,000 AGI for everyone else.

Unlike the prior two stimulus payments, eligible recipients may receive up to $1,400 for all qualifying dependents, including those age 17 and older at year-end.

Tip: The IRS will use the most recently filed tax return to determine these amounts, so do the following to increase your odds of getting a stimulus payment:

If your 2020 income decreased (from 2019) and is below or within one of the ranges above, file your 2020 return as soon as possible, so that your lower 2020 income will be used to determine whether you get a stimulus payment and how much it will be.

If your 2020 income increased (from 2019) to a point that disqualifies you from receiving a stimulus check or reduces the amount, consider waiting to file your 2020 tax return until you receive your stimulus payment.

Taking Advantage of the Extension to Unemployment Insurance

The American Rescue Plan Act of 2021 extends federal supplemental unemployment benefits that were set to expire on March 14, 2021. The new law extends the period eligible individuals may receive an additional Continue reading… Continue reading… Continue reading…