I 

108TH CONGRESS 

2D SESSION H. R. 4723 

To amend the Internal Revenue Code of 1986 to provide an exclusion from 

gross income for student loan payments made by an employer on behalf 

of an employee. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 25, 2004 

Mr. BRADLEY of New Hampshire (for himself and Mr. SENSENBRENNER) introduced the following bill; which was referred to the Committee on Ways 

and Means 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

an exclusion from gross income for student loan payments made by an employer on behalf of an employee. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. EXCLUSION FOR EMPLOYER STUDENT LOAN 

4 REPAYMENTS. 

5 (a) IN GENERAL.—Part III of subchapter B of chap6 ter 1 of the Internal Revenue Code of 1986 is amended 

7 by inserting after section 106 the following new section: 
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1 ‘‘SEC. 106A. EMPLOYER STUDENT LOAN REPAYMENTS. 

2 ‘‘(a) IN GENERAL.—Gross income of an employee 

3 does not include payments made by the employer on behalf 

4 of an employee on any qualified education loan (within the 

5 meaning of section 221(d)) of such employee. 

6 ‘‘(b) COORDINATION WITH INTEREST DEDUCTION.— 

7 Any payment taken into account under this section shall 

8 not be taken into account under section 221. 

9 ‘‘(c) CROSS REFERENCE.—For penalty on failure by 

10 employer to offer comparable payments on qualified edu11 cation loans of comparable employees, see section 

12 4980H.’’. 

13 (b) FAILURE OF EMPLOYER TO MAKE COMPARABLE

14 PAYMENTS ON QUALIFIED EDUCATION LOANS OF EM15 PLOYEES.—Chapter 43 of such Code is amended by add16 ing at the end the following new section: 

17 ‘‘SEC. 4980H. FAILURE OF EMPLOYER TO MAKE COM18 PARABLE PAYMENTS ON QUALIFIED EDU19 CATION LOANS OF EMPLOYEES. 

20 ‘‘(a) IMPOSITION OF TAX.—There is hereby imposed 

21 a tax on the failure of any employer to make available 

22 comparable payments on the qualified education loans of 

23 each employee of the employer for any calendar year. 

24 ‘‘(b) AMOUNT OF TAX.—The amount of the tax im25 posed by subsection (a) on any failure for any calendar 

26 year is the amount equal to 35 percent of the aggregate 
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1 amount of payments made by the employer on qualified 

2 education loans of employees for the calendar year. 

3 ‘‘(c) COMPARABLE PAYMENTS.— 

4 ‘‘(1) IN GENERAL.—For purposes of this sec5 tion, the term ‘comparable payments’ means pay6 ments which are— 

7 ‘‘(A) the same amount, or 

8 ‘‘(B) limited by the amount due under the 

9 qualified education loans (if any). 

10 ‘‘(2) PART-YEAR EMPLOYEES.—In the case of 

11 an employee who is employed by the employer for 

12 only a portion of the calendar year, a payment shall 

13 be treated as comparable if it is an amount which 

14 bears the same ratio to the comparable amount (de15 termined without regard to this paragraph) as such 

16 portion bears to the entire calendar year. 

17 ‘‘(d) SEPARATE APPLICATION FOR PART-TIME EM18 PLOYEES.—The requirements of this section shall be ap19 plied separately with respect to part-time employees and 

20 other employees. For purposes of the preceding sentence, 

21 the term ‘part-time employee’ means any employee who 

22 is customarily employed for fewer than 30 hours per week. 

23 ‘‘(e) WAIVER BY SECRETARY.—In the case of a fail24 ure which is due to reasonable cause and not to willful 

25 neglect, the Secretary may waive part or all of the tax 
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1 imposed by subsection (a) to the extent that the payment 

2 of such tax would be excessive relative to the failure in3 volved.’’. 

4 (c) CLERICAL AMENDMENTS.— 

5 (1) The table of sections for part III of sub6 chapter B of chapter 1 of such Code is amended by 

7 inserting after the item relating to section 106 the 

8 following new item: 

‘‘Sec. 106A. Employer student loan repayments.’’. 

9 (2) The table of sections for chapter 43 of such 

10 Code is amended by adding at the end the following 

11 new item: 

‘‘Sec. 4980H. Failure of employer to make comparable payments on qualified 

education loans of employees.’’. 

12 (d) EFFECTIVE DATE.—The amendments made by 

13 this section shall apply to payments made after the date 

14 of the enactment of this Act in taxable years ending after 

15 such date. 

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