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| Student Loan Payoff By Employer. |
Question:
If an employer pays off a student
loan
for a potential employee, The company
can deduct this expense as a loss,
I assume? How does the employee
file this benefit? As misc income,
for the value of the payoff?
Answer:
It would
not be a loss, but it would be a payroll
expense, as the payoff should be subject
to payroll taxes, same as compensation.
So the company would pay their half
of SS/Medicare on the payoff and withhold
fed, ss/medi, state and whatever else
is normal in your state. Helen, EA
in PA Member of NAEA, NATP and the
Tax Gang It's
always risky to venture a response
to this sketchy a set of facts, but
it appears to me that you are saying
that a prospective employer is considering
paying off the student loans of a
prospective employee as a sort of
signing bonus. In this situation,
the payment of the loans by the employer
is considered compensation both by
the employer and the employee. Among
other things, it would be subject
to social security taxes and wage
withholding. It would be reported
on the employee's W-2 along with other
wages. The employer would deduct the
payment in the same way it deducts
the employee's wages.
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