U.S. employees can continue to receive up to $5,250 in tax-free educational assistance from their employers for calendar years 2025 and 2026, the IRS said in an April 20 update.
Section 127 educational assistance programs allow employers to provide financial assistance to their employees for education programs. The $5,250 in tax-free assistance was scheduled to expire last year, but the One Big Beautiful Bill Act made this provision permanent.
In its latest update, the IRS said that for 2025 and 2026, “an employee’s gross income does not include educational assistance benefits if the benefits are provided under a Section 127 educational assistance program and the amounts do not exceed $5,250.”…