Combines both tuition assistance and student loan repayment assistance under a single $5,250 annual cap, following a permanent extension under recent tax law.
How it works
Tuition assistance plus student loan repayment assistance from the same employer, capped at $5,250, gives the amount excluded from taxable income — anything above that combined cap is taxable.
What this does not include
This computes the exclusion for one employee’s assistance from one employer — an employee working multiple jobs with educational assistance from more than one employer would need to track the combined cap across all sources separately.
How to use this calculator
- Enter employer tuition assistance and employer student loan repayment assistance.
Frequently asked questions
Why were tuition and student loan assistance combined under one cap?
Legislation temporarily added student loan repayment as an eligible Section 127 benefit starting with the CARES Act, and the One Big Beautiful Bill Act made that combined structure permanent rather than letting it expire.
Does the employer need a formal written plan?
Yes — Section 127 requires a written educational assistance plan meeting specific IRS requirements for the exclusion to apply.
Will the $5,250 cap ever increase?
Yes — starting with taxable years after December 31, 2026, the cap becomes indexed for inflation, gradually increasing in future years rather than staying fixed indefinitely.
