The IRS recently issued Fact Sheet 2024-22 containing a set of FAQs related to educational assistance programs under Internal Revenue Code section 127. Generally, employees may exclude certain educational assistance benefits from their gross income if provided under a written employer-sponsored educational assistance program (up to $5,250 per calendar year).
There are two types of educational assistance benefits available via an educational assistance program:
The nine FAQs discuss educational assistance programs generally, qualified educational loans, student debt, non-discrimination requirements and exclusions from gross income for educational assistance other than under section 127. Although there is no new substantive information, the FAQs serve as a reminder of some of the existing IRS educational assistance guidance.
Note: The IRS issues FAQs to provide general information faster than through official guidance. FAQs may not address a taxpayer’s specific facts and circumstances, and they may be updated or modified upon further review. Because FAQs are not published in the IRS Internal Revenue Bulletin, they will not be relied on or used by the IRS to resolve a case. Similarly, if an FAQ turns out to be an inaccurate statement of the law as applied to a particular taxpayer’s case, the law will control the taxpayer’s tax liability; however, a taxpayer who reasonably and in good faith relies on IRS FAQs may not be subject to a penalty.
