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Employer-Provided Educational Assistance
Congress Will Decide Fate of Employee Tax Benefit
When Congress returns to Washington after Labor Day, we expect a decision on whether to extend an important tax provision for employees and employers alike. It’s Section 127 of the U.S. tax code, allowing employers to provide employees with up to $5,250 a year in tax-free educational assistance. If Congress doesn’t act, the provision expires at midnight on Dec. 31.
Fortunately, some members are hoping to beat the clock. Representatives Earl Pomeroy (D-ND) and Sam Johnson (R-TX) have introduced the Employee Educational Assistance Act of 2010 (H.R. 5600), which would make Section 127 permanent.
Under the terms of Section 127, employees don’t have to report employer-provided tuition reimbursement as personal income, whether the assistance is for any course at the associate, undergraduate or graduate level. The provision has been on the books since 1978, and today nearly a million working Americans take advantage of it every year. The benefit is also an important recruitment and retention tool for employers.
SHRM strongly supports efforts to make Section 127 permanent and co-chairs the Coalition to Preserve Employer Provided Education Assistance, a broad-based collection of groups representing business, labor and education. The coalition recently launched a Web site and released a comprehensive study, “Who Benefits from Section 127?”  which can be found at the following website:
If you would like to urge your House member to support Section 127, please write to your elected official today!
If you have any questions or comments, please contact me at 414-423-1330 or via e-mail at:
Thomas P. Krukowski, Esq.
Krukowski & Costello, S.C.
Legislative Partner

Krukowski &
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Margie Harvey

Margie Harvey, SPHR
Miles Kimball Company 
250 City Center
Oshkosh, WI  54906
Ph: 920.232.6409
Fx: 920.231.1247   

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