IRS Allows Retirement Match for Student Loan Repayments

(from SHRM) With growing numbers of professionals carrying student loans for years, the IRS has agreed to make it that much easier for employers to help these workers both pay off student debt while contributing to their retirement savings. The agency's ruling, in a letter August 17, responds to a request by an unnamed employer that proposed amending its 401(k) plan to offer a student-loan benefit program under in it would make special 401(k) contributions into the accounts of employees making student loan repayments. Unlike student loan repayment dollars given directly to employees, which are treated as taxable income, employer 401(k) contributions are not taxable. As a result, this approach achieves tax advantages like those associated with traditional tuition-reimbursement benefits.

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