The American Rescue Plan Act was enacted on March 11,2021 and has substantially changed and extended provisions of The Family First Act (FFCRA) that was to expire on March 31, 2021. Human Resource leaders are awaiting the IRS to provide guidance and interpretation of this new Act. Below is a current summary of what we are able to decipher of the new Act.
The Coronavirus Aid, Relief and Economic Security (CARES) Act has now extended the provision to add student loan payments as part of Tuition Reimbursement under Section 127 of the IRS Code through December 31, 2025.
This four-year extension provides a more acceptable provision, allowing Companies to build a great Retention Program knowing it will be around for a at least 4 years and, and thus attracting Candidates to join their Companies. Due to the rising debt of student loans and a political movement to help students repay their loans, there are strong indications that Congress is expected to make this temporary change permanent. Before the recent permission of the CARES Act employees and employers both were required to pay the payroll taxes on student loan paid by an employer.