Section 127

Section 127 – Employer Provided Education Assistance will expire on December 31, 2010, unless Congress acts to make this provision a permanent part of the U.S. tax code.

From our friends at The Coalition to Preserve Employer Provided Tutition Assistance comes the following:

Section 127 – Employer Provided Education Assistance will expire on December 31, 2010, unless Congress acts to make this provision a permanent part of the U.S. tax code.

 What is Section 127 – Employer Provided Education Assistance?

Employer provided education assistance is a part of Section 127 of the U.S. tax code allows an employee to exclude from income up to $5,250 a year in employer-provided tuition assistance for undergraduate and graduate-level courses. The provision will expire at the end of the year unless Congress takes action.

 This education-assistance provision was established in 1978 and has been extended by Congress eight times, most recently in 2001. Currently, Representatives Earl Pomeroy, (D-ND) and Sam Johnson, (R-TX), have introduced the Employee Educational Assistance Act of 2010 (H.R. 5600) to make the provision permanent. In addition, U.S. Senator Chuck Grassley, (R-IA) has introduced a tax bill in the Senate that would preserve important educational tax provisions (S. 2851), including Section 127.

 Why is Section 127 Important?

This benefit helps build and maintain an increasingly skilled workforce and positions our nation to remain competitive in the global economy. Almost 20 percent of recipients are pursuing science, technology, engineering and mathematics (STEM) degrees. A 2009 Society for Human Resource Management poll showed that 76 percent of organizations offered education assistance for undergraduate or graduate study or both.

 Who Benefits From Section 127?

Employer provided education assistance helps employees better themselves without increased tax liability, and it helps employers by encouraging them to invest in their workforce.  According to a study by the Society for Human Resource Management and the National Association of Independent Colleges and Universities, the number of people receiving the benefit more than doubled between 1992 and 2007, from 431,500 to 913,100. 

 What Can You Do?

Please urge your Members of Congress to support bills that would permanently extend Employer Provided Education Assistance, Section 127 of the U.S. tax code.