NAICU Washington Update

House Bill Would Make Sec. 127 Benefit Permanent

March 13, 2012

H.R. 4137, introduced in the House on March 5, would make the important Sec. 127 tax benefit for working students a permanent part of law.  This benefit has been a temporary expiring provision since 1978.

Under Sec. 127 of the Internal Revenue Code, employers can provide up to $5,250 in annual tuition assistance to employees. The amount is not taxable to the employers or to employees.  The bill would make IRC Sec. 127 a permanent tax benefit for both undergraduate and graduate course work.

Introduced by Reps. Sam Johnson (R-Texas) and Richard Neal (D-Mass.), the Employee Educational Assistance Act of 2012 is a result of the work of the Coalition to Preserve Employer Provided Education Assistance, which NAICU co-chairs along with the Society for Human Resource Management.  Also known as the Sec. 127 Coalition, this broad bipartisan group represents higher education, business, and labor organizations. 

Under current law, Sec. 127 is set to expire on December 31, 2012.  The Coalition is advocating that the provision be made permanent rather than merely extended.

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