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Inova Health, other companies help workers repay student loans

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In a fiercely competitive labor market, companies offer to pay student loans and play to attract and retain employees.

Announced this spring, Inova Health Systems will donate $ 150 a month to pay off the education debt of employees who have worked for less than three years, and $ 250 a month for employees who have been in office longer than that. Announced that it will donate.

Wendy Jolly, Vice President of Human Resources at Innova, said: “We want them to feel like they have a competitive set of payroll and profit programs that rival the excellence we expect.”

Employer Watch out for the phone Of young workers to support education debt and take advantage of the new tax cuts born from Pandemic..Still, many companies are considering benefits rather than actually implementing them, reluctant experts say they are rooted in uncertainty about federal policy. Debt forgiveness When pay back debt..

Do you want your employer to help you with your student loan? The proposed tax cut may work.

Prior to the pandemic, student loan repayment benefits were one of the most popular perks in the United States for businesses. According to the report, the percentage of employers providing student loan repayment support doubled to 8% between 2016 and 2019. Human Resource Management Association..

2021 Investigation According to the Employee Welfare Institute, employers have tried to provide immediate financial support to workers, resulting in a shift in priority as a result of covid-19. In the form of a short-term loan or emergency assistance.Craig Copeland, Senior Research Associate of the Institute, has been with us for two years. Suspend federal student loan payments We have also placed an employer-sponsored program in the back burner.

Companies are rethinking profits as the economy recovers, workers demand rises, and job seekers grow. More selective..

Almost half of the 250 large-scale employees surveyed by the Institute in 2021 (employees with more than 500 employees) benefit or provide student loan support compared to 32% in 2018. intend to do something. Advisory firm Willis Towers Watson said in 2021 that it would offer direct repayment of student loans.

In March, Inova rolled out a student loan support program for more than 20,000 employees on a network of five hospitals and medical facilities in northern Virginia. To date, Jolly has 1,600 registered employees, or one in ten.

This benefit is available to all employees and has a benefit of up to $ 10,000.

Inova manages the program in partnership with Edcor Data Services LLC, an education benefit company. The employee provides the loan information to Edcor, who sends the payment from Inova to the student loan servicer.

Not much attention in 2020 Coronavirus Assistance, Relief and Financial Security Act, Or the Cares Act has also made it cheaper for businesses to help employees repay student loans. Companies can provide employees with up to $ 5,250 annually in debt without taxing contributions. Employees are also exempt from being taxed on money.

According to accounting firms, if a company donates $ 5,250 to pay a student loan prior to tax incentives, employers and employees will be subject to an estimated $ 400 payroll tax. Insonya CPA.. Some employees are subject to the federal income tax rate of 22.6% You have to pay about $ 1,190 in federal income tax.

Companies offering back-end support for student loan support programs are reporting an increase in companies that are receiving tax cuts to secure more money for profit.

Sofiat Work, which supports corporate profits, has seen an increase of over 30 Percentage of contributions to the loan repayment program from the first quarter of 2020 to the first quarter of 2021. The number of payments made by employers has more than doubled during the same period. Lead with Sofiat Work.

After the tax reform, Fidelity Investments has increased the maximum profit it can provide to its employees to help repay their education debt from $ 10,000 to $ 15,000. In January, Google launched a program to pay employees up to $ 2,500 a year in student loans.

According to Copeland, this tax deduction is comparable to existing tax incentives for tuition refunds, but it is only valid until 2025. Congress can extend the tax cut or make it permanent before it expires, but it’s unclear if that will happen.

Companies are also waiting to see if the Senate approves a law that allows employers to match loan repayments with severance pay account contributions, Copeland said. The House of Representatives passed the bill in March.

“There isn’t much certainty about profits yet,” Copeland said. “The clarity of tax issues, the decision to forgive debt from the Biden administration, and the resumption of repayments … will probably change them. [from companies] Yes, we offer this benefit. “

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