The Section 127 Coalition Strengthen & Expand Employer-Provided Education Assistance
The Section 127 Coalition is a broad coalition of business, labor, and education organizations dedicated to expanding and strengthening Section 127 of the Internal Revenue Code, which allows employers the ability to offer education assistance to employees as a benefit on a tax-free basis. Providing employers the flexibility to offer support throughout the education life-cycle gives employees more choices in their education-related decisions. Providing tax-free educational assistance is a vital tool for increasing access to higher education, strengthening the American workforce, and positioning the U.S. economy to compete globally.
Section 127 of the Internal Revenue Code (IRC) allows an employee to exclude from income up to $5,250 per year in educational assistance provided by their employer for courses at the associate, undergraduate, and graduate level. Although education assistance is a voluntary benefits offering, an employer that chooses to provide these benefits to their employees must do so on a nondiscriminatory basis that does not favor highly compensated employees. Since it was created in 1978, Congress extended Section 127 nine times and, due in large part to the Section 127 Coalition’s efforts, finally made the provision permanent with the passage of the American Taxpayer Relief Act (Pub.L. 112–240) on January 1, 2013.
Currently, the Section 127 Coalition is engaged in several efforts to increase the monetary limits and scope of Section 127, provisions in the law that have gone unchanged for over 40 years.