Skip to main content

#student-loans

Student Loans

Employer student loan repayment assistance, education financing, and Section 127 benefits

6 postsView all tagsBack to All Posts
11 min read

Section 129 and Section 127: Giving Employees $12,750 Tax-Free and Reporting It Right on the W-2

For 2026 the Section 129 dependent care exclusion rises from $5,000 to $7,500 and Section 127 student loan repayment becomes permanent, so an employer can move up to $12,750 per employee outside wages. This guide covers the written-plan and nondiscrimination rules, which W-2 boxes each benefit lands in — all dependent care in Box 10, excludable educational assistance nowhere — and the seven errors that turn a tax-free benefit into taxable wages.

Mike Thrift

payrollemployee-benefitstax-compliance
10 min read

Still Paying Off School While Running Your Business? How the $2,500 Student Loan Interest Deduction Works in 2026

For tax year 2026 the student loan interest deduction is capped at $2,500, claimed above the line on Schedule 1, and phases out between $85,000 and $100,000 of MAGI for single filers and $175,000 to $205,000 for joint filers. This guide covers the five eligibility tests, what Form 1098-E does and does not report, and why self-employed borrowers cannot move the interest to Schedule C.

Mike Thrift

student-loanstax-deductionsself-employment
11 min read

Are Forgiven Student Loans Taxable in 2026? The IDR Tax Bomb, Who Stays Tax-Free, and the Form 982 Escape Hatch

The ARPA exclusion for student loan discharges expired on December 31, 2025, so income-driven repayment forgiveness after 20 or 25 years, closed-school and borrower-defense discharges are federal taxable income again from 2026, while PSLF, teacher-service and death or disability discharges remain tax-free. A $49,000 IDR discharge can add roughly $5,800 to $10,000 in federal tax; the Form 982 insolvency exclusion, early AGI planning and your own payment ledger are the tools that shrink the bill.

Mike Thrift

student-loansloan-forgivenesstax
11 min read

Tax Refund Seized? How the Treasury Offset Program Works and How Injured Spouses Get Their Share Back

The Treasury Offset Program lets the Bureau of the Fiscal Service withhold a federal tax refund to pay past-due child support, defaulted federal student and SBA loans, state income tax, and unemployment debts, in that priority order. Creditor agencies must mail a Notice of Intent to Offset at least 60 days before referral, giving you time to pay, sign a repayment agreement, or dispute the debt. When the debt belongs only to your spouse, Form 8379 Injured Spouse Allocation recovers your share of a joint refund in roughly 8 to 14 weeks.

Mike Thrift

taxtax-filingtax-compliance
11 min read

Student Loan Wage Garnishment Is Back in 2026: What Employers Must Do When an Order Lands on Your Desk

Federal student loan wage garnishment resumed in 2026 and needs no court order. Employers must withhold up to 15% of disposable earnings while leaving the worker at least $217.50 a week (30 times the federal minimum wage), remit with the case number each pay period, never fire an employee over a single garnishment, and book withholdings to a Garnishments Payable liability account rather than an expense.

Mike Thrift

student-loanspayrollwithholding
Start Free→Documentation