Student Loan Repayment Acceleration Act

II 116TH CONGRESS 1ST SESSION S. 2347 To amend the Internal Revenue Code of 1986 to exclude employer contributions to student loan repayment from income, and for other purposes. IN THE SENATE OF THE UNITED STATES JULY 31, 2019 Mr. GARDNER introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to exclude employer contributions to student loan repayment from income, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Student Loan Repay- 4 ment Acceleration Act’’. 5 SEC. 2. EXCLUSION FOR EMPLOYER CONTRIBUTIONS TO 6 STUDENT LOAN REPAYMENT. 7 (a) IN GENERAL.—Part III of subchapter B of chap- 8 ter 1 of the Internal Revenue Code of 1986 is amended 9 by inserting after section 139G the following new section: 10 VerDate Sep 11 2014 00:53 Aug 08, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2347.IS S2347 kjohnson on DSK79L0C42 with BILLS 2 •S 2347 IS ‘‘SEC. 139H. EMPLOYER CONTRIBUTIONS TO STUDENT 1 LOAN REPAYMENT. 2 ‘‘(a) IN GENERAL.—Gross income of an employee 3 shall not include any qualifying student loan payment. 4 ‘‘(b) QUALIFYING STUDENT LOAN PAYMENT.—For 5 purposes of this section— 6 ‘‘(1) IN GENERAL.—In the case of an indi- 7 vidual, the term ‘qualifying student loan payment’ 8 means any payment or contribution made by the in- 9 dividual’s employer in repayment of a qualified edu- 10 cation loan (as defined in section 221(d)(1)) in- 11 curred to pay the higher education expenses of the 12 individual, without regard to whether such payment 13 is made as a match to payments made by the indi- 14 vidual, independently of any payments by the indi- 15 vidual, or is determined in any other manner. 16 ‘‘(2) LIMITATION.—Such term shall not include 17 any such payments or contributions to the extent 18 they exceed $10,000 during the taxable year. 19 ‘‘(c) NONDISCRIMINATION RULES.— 20 ‘‘(1) IN GENERAL.—Rules similar to the rules 21 of paragraphs (2), (3), and (4) of section 127(b) 22 shall apply to any program or policy of an employer 23 to provide qualifying student loan payments to em- 24 ployees of the employer. Subsection (a) shall not 25 apply to any qualifying student loan payment made 26 VerDate Sep 11 2014 00:53 Aug 08, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2347.IS S2347 kjohnson on DSK79L0C42 with BILLS 3 •S 2347 IS under a program or policy which does not satisfy 1 such rules. 2 ‘‘(2) ELIGIBILITY.—For purposes of the rules 3 described in paragraph (1), an employee of an em- 4 ployer shall not be treated as ineligible to receive 5 qualifying student loan payments under a program 6 or policy of the employer solely because such em- 7 ployee does not have debt incurred under a qualified 8 education loan (as defined in section 221(d)(1)). 9 ‘‘(d) SELF-EMPLOYED INDIVIDUALS, ETC.—For pur- 10 poses of this section— 11 ‘‘(1) EMPLOYEE.—The term ‘employee’ in- 12 cludes, for any year, an individual who is an em- 13 ployee within the meaning of section 401(c)(1). 14 ‘‘(2) EMPLOYER.—An individual who owns the 15 entire interest in an unincorporated trade or busi- 16 ness shall be treated as the individual’s own em- 17 ployer. A partnership shall be treated as the em- 18 ployer of each partner who is an employee within the 19 meaning of paragraph (1).’’. 20 (b) CONFORMING AMENDMENTS.— 21 (1) Paragraph (7) of section 127(c) of the In- 22 ternal Revenue Code of 1986 is amended to read as 23 follows: 24 VerDate Sep 11 2014 04:04 Aug 08, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2347.IS S2347 kjohnson on DSK79L0C42 with BILLS 4 •S 2347 IS ‘‘(7) DENIAL OF DOUBLE BENEFIT.—No deduc- 1 tion, credit, or exclusion shall be allowed to the em- 2 ployee under any other section of this chapter for 3 any amount excluded from income by reason of this 4 section, including the amount of any qualifying stu- 5 dent loan payment which is excluded from income 6 under section 139H.’’. 7 (2) Paragraph (1) of section 221(e) of such 8 Code is amended by inserting ‘‘, or for any amount 9 for which an exclusion is allowable under section 10 139H’’ before the period. 11 (c) EXCLUSION OF QUALIFYING STUDENT LOAN 12 PAYMENTS FROM PAYROLL TAXES.— 13 (1) IN GENERAL.—Paragraph (20) of section 14 3121(a) of the Internal Revenue Code of 1986 is 15 amended by striking ‘‘or 132’’ and inserting ‘‘132, 16 or 139H’’. 17 (2) FEDERAL UNEMPLOYMENT TAX.—Para- 18 graph (16) of section 3306(b) of such Code is 19 amended by striking ‘‘or 132’’ and inserting ‘‘132, 20 or 139H’’. 21 (d) CLERICAL AMENDMENT.—The table of sections 22 for part III of subchapter B of chapter 1 of the Internal 23 Revenue Code of 1986 is amended by inserting after the 24 item relating to section 139G the following new item: 25 ‘‘Sec. 139H. Employer contributions to student loan repayment.’’. VerDate Sep 11 2014 00:53 Aug 08, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6211 E:\BILLS\S2347.IS S2347 kjohnson on DSK79L0C42 with BILLS 5 •S 2347 IS (e) EFFECTIVE DATE.—The amendments made by 1 this section shall apply to taxable years beginning after 2 December 31, 2019. 3 Æ VerDate Sep 11 2014 00:53 Aug 08, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6301 E:\BILLS\S2347.IS S2347 kjohnson on DSK79L0C42 with BILLS