Student Loan Repayment Assistance Act of 2015

To amend the Internal Revenue Code of 1986 to exclude from Federal income taxation certain employer-provided student loan assistance, and for other purposes. 1. Short title This Act may be cited as the Student Loan Repayment Assistance Act of 2015 2. Exclusion from gross income of benefits under certain student loan payment assistance programs (a) In general Part III of subchapter B of chapter 1 127A. Student loan payment assistance programs (a) In general Gross income of a qualified employee does not include amounts paid or incurred by the employer for student loan payment assistance provided to such employee if the assistance is furnished pursuant to a program which is described in subsection (c). (b) Qualified employee For purposes of this subsection, the term qualified employee (c) Limitations (1) Assistance limitation The amount taken into account under subsection (a) with respect to an individual for student loan assistance with respect to student loan payments during a taxable year shall not exceed $6,000. (2) Earned income limitation The amount excluded from the income of an employee under subsection (a) for any taxable year shall not exceed the earned income of such employee for such taxable year. (d) Student loan payment assistance program (1) In general For purposes of this section a student loan payment assistance program is a separate written plan of an employer for the exclusive benefit of his employees to provide such employees with student loan payment assistance which meets the requirements of paragraphs (2) through (10) of this subsection. If any plan would qualify as a student loan payment assistance program but for a failure to meet the requirements of this subsection, then, notwithstanding such failure, such plan shall be treated as a student loan payment assistance program in the case of employees who are not highly compensated employees. (2) Discrimination The contributions or benefits provided under the plan shall not discriminate in favor of employees who are highly compensated employees (within the meaning of section 414(q)). (3) Eligibility The program shall benefit employees who qualify under a classification set up by the employer and found by the Secretary not to be discriminatory in favor of employees described in paragraph (2). (4) Principal shareholders or owners Not more than 25 percent of the amounts paid or incurred by the employer for student loan payment assistance during the year may be provided for the class of individuals who are shareholders or owners (or their spouses or dependents), each of whom (on any day of the year) owns more than 5 percent of the stock or of the capital or profits interest in the employer. (5) No funding required A program referred to in paragraph (1) is not required to be funded. (6) Notification of eligible employees Reasonable notification of the availability and terms of the program shall be provided to eligible employees. (7) Statement of expenses The plan shall furnish to an employee, on or before January 31, a written statement showing the amounts paid or expenses incurred by the employer in providing student loan payment assistance to such employee during the previous calendar year. (8) Benefits (A) In general A plan meets the requirements of this paragraph if the average benefits provided to employees who are not highly compensated employees under all plans of the employer is at least 55 percent of the average benefits provided to highly compensated employees under all plans of the employer. (B) Salary reduction agreements For purposes of subparagraph (A), in the case of any benefits provided through a salary reduction agreement, a plan may disregard any employees whose compensation is less than $25,000. For purposes of this subparagraph, the term compensation (9) Contributions made directly to lender A plan meets the requirements of this paragraph if all benefits provided under the plan are paid directly to the holder of the indebtedness referred to in subsection (d)(1)(A)(i). (10) Matching contributions A plan which meets the requirements of paragraphs (2) through (9) shall not fail to be treated as a program described in this subsection merely because such plan provides for the employer to make matching contributions with respect to employee contributions. (e) Definitions and special rules For purposes of this section— (1) Student loan payment assistance (A) In general The term student loan payment assistance (i) any indebtedness incurred by the employee solely to pay qualified higher education expenses (as defined in section 221) which— (I) are paid or incurred within a reasonable period of time before or after the indebtedness was incurred, and (II) are attributable to education furnished during a period during which the employee was an eligible student, or (ii) any indebtedness used to refinance indebtedness described in clause (i). Such term shall not include any payment of principal or interest on indebtedness owed to a person who is related (within the meaning of section 267(b) or 707(b)(1)) to the taxpayer or to any person by reason of a loan under any qualified employer plan (as defined in section 72(p)(4)) or under any contract referred to in section 72(p)(5). (B) Eligible student For purposes of this subsection, the term eligible student 20 U.S.C. 1091(a)(1) (C) Dependent The term dependent (2) Earned income The term earned income (3) Employee The term employee (4) Employer An individual who owns the entire interest in an unincorporated trade or business shall be treated as his own employer. A partnership shall be treated as the employer of each partner who is an employee within the meaning of paragraph (3). (5) Attribution rules (A) Ownership of stock Ownership of stock in a corporation shall be determined in accordance with the rules provided under subsections (d) and (e) of section 1563 (without regard to section 1563(e)(3)(C)). (B) Interest in unincorporated trade or business The interest of an employee in a trade or business which is not incorporated shall be determined in accordance with regulations prescribed by the Secretary, which shall be based on principles similar to the principles which apply in the case of subparagraph (A). (6) Utilization test not applicable A student loan payment assistance program shall not be held or considered to fail to meet any requirements of subsection (c) (other than paragraphs (4) and (8) thereof) merely because of utilization rates for the different types of assistance made available under the program. (7) Disallowance of excluded amounts as credit or deduction No deduction or credit shall be allowed to the employee under any other section of this chapter for any amount excluded from the gross income of the employee by reason of this section. (8) Treatment of salary reduction amounts Any matching contribution withheld from an employee under a student loan payment assistance program pursuant to a salary reduction agreement shall be treated for purposes of this title as an amount paid by the employee and not as an amount paid by the employer. . (b) Conforming amendments Sections 221(d)(2)(A), 414(n)(3)(C) and (t)(2), 3121(a)(18), 3306(b)(13), 3401(a)(18), and 6039D(d)(1) of such Code are each amended by inserting 127A, 127, (c) Clerical amendment The table of sections for part III of subchapter B of chapter 1 of such Code is amended by inserting after the item relating to section 127 the following new item: Sec. 127A. Student loan payment assistance programs. . (d) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act. 3. Deduction for student loan payments which are matched by an employer (a) In general Part VII of subchapter B of chapter 1 224. Deduction for student loan payments which are matched by an employer (a) In general In the case of an individual who is a qualified employee (as defined in section 127A), there shall be allowed as a deduction an amount equal to the student loan payments made by such individual with respect to which an employer of such individual makes matching contributions under a student loan payment assistance program which are excludible from the gross income of such employee under section 127A. (b) Annual limitation The amount allowable as a deduction under subsection (a) with respect to any individual for any taxable year shall not exceed $6,000. (c) Lifetime limitation The amount allowable as a deduction under subsection (a) with respect to any individual for any taxable year shall not exceed the excess of— (1) $50,000, over (2) the aggregate amount allowable as a deduction under subsection (a) with respect to such individual for all prior taxable years. (d) Denial of double benefit Any amount excluded from the gross income of an individual under section 127A shall not be treated as an amount paid by such individual for purposes of this section. The amount of principal and interest with respect to which a deduction is allowed under this section shall not be taken into account in determining the amount of any other deduction or credit allowed under this chapter. . (b) Clerical amendment The table of sections for part VII of subchapter B of chapter 1 of such Code is amended by redesignating the item relating to section 224 as an item relating to section 225 and by inserting after the item relating to section 223 the following new item: Sec. 224. Deduction for student loan payments which are matched by an employer. . (c) Effective date The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

Summary: Student Loan Repayment Assistance Act of 2015 Amends the Internal Revenue Code to exclude from the gross income of an employee amounts paid by an employer under a student loan payment assistance program. Requires participating employees to pay at least $50 per month on their student loans (in addition to the amount excluded from their gross income under such program). Limits the amount of such exclusion to $6,000 in a taxable year. Requires an employer student loan payment assistance program to be a separate written plan of an employer to provide employees with student loan payment assistance. Defines &quot;student loan payment assistance&quot; as the payment of principal or interest on any indebtedness incurred by an employee solely to pay qualified higher education expenses that are paid or incurred within a reasonable time before or after such indebtedness was incurred and that are attributable to education furnished during a period in which such employee was a student eligible for federal financial assistance. Allows an employee to take an income tax deduction in an amount equal to the employee's student loan payments that are matched by excludible employer contributions under a student loan payment assistance program. Limits the amount of such deduction to $6,000 in a taxable year and $50,000 over a lifetime.