Compliance Stuff

The Internal Revenue Service has released updated frequently asked questions addressing educational assistance programs under Section 127 of the Internal Revenue Code, along with a revised sample plan document, Publication 5993 (Rev. 4-2026). The updated guidance represents changes made by the One Big Beautiful Bill of 2025, providing clarification for employers that offer—or are considering offering—tuition assistance or student loan repayment benefits. Chance to Revamp : The updated guidance, reformed by the One Big Beautiful Bill , gives employers a timely opportunity to modernize Section 127 programs, including by revising plan documents, expanding or formalizing student loan repayment features, and reassessing compliance with notice and nondiscrimination requirements. Section 127 permits employers to provide certain educational benefits to employees on a tax-free basis through a written educational assistance program. Employees may currently exclude up to $5,250 per year from gro...

During the Presidential campaign and the subsequent Sunday talk shows leading up to the One Big Beautiful Bill (“BBB”), American voters heard that overtime (“OT”) compensation will be tax free. Now that the legislation has passed, that’s only “kinda sorta” true. No wages are exempt from taxation, so payroll deductions on OT will continue, and that means weekly paychecks will not increase due to the BBB. The BBB allows for a  deduction  to be taken on employee tax returns for the OT premium – an hourly wage of $20 has an OT premium of $10 . Only the $10 may be deducted. The deduction is capped: $12,500 for single filers, $25,000.00 for married filers. Only FLSA qualified OT is eligible for the deduction.  State laws with OT after 8 hours, company paid OT not required by federal law and similar OT opportunities paid pursuant to a contract or collective bargaining agreement are not eligible for the deduction. The BBB and this exemption apply to tax year 2025.  Howe...