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) in-
troduced 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 pay-
ments made by an employer on behalf of an employee. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. EXCLUSION FOR EMPLOYER STUDENT LOAN 
REPAYMENTS. 
(a) IN GENERAL.—Part III of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 is amended 
by inserting after section 106 the following new section:
‘‘SEC. 106A. EMPLOYER STUDENT LOAN REPAYMENTS. 
‘‘(a) IN GENERAL.—Gross income of an employee 
does not include payments made by the employer on behalf 
of an employee on any qualified education loan (within the 
meaning of section 221(d)) of such employee. 
‘‘(b) COORDINATION WITH INTEREST DEDUCTION.— 
Any payment taken into account under this section shall 
not be taken into account under section 221. 
‘‘(c) CROSS REFERENCE.—For penalty on failure by 
employer to offer comparable payments on qualified edu-
cation loans of comparable employees, see section 
4980H.’’. 
(b) FAILURE OF EMPLOYER TO MAKE COMPARABLE 
PAYMENTS ON QUALIFIED EDUCATION LOANS OF EM-
PLOYEES.—Chapter 43 of such Code is amended by add-
ing at the end the following new section: 
‘‘SEC. 4980H. FAILURE OF EMPLOYER TO MAKE COM-
PARABLE PAYMENTS ON QUALIFIED EDU-
CATION LOANS OF EMPLOYEES. 
‘‘(a) IMPOSITION OF TAX.—There is hereby imposed 
a tax on the failure of any employer to make available 
comparable payments on the qualified education loans of 
each employee of the employer for any calendar year. 
‘‘(b) AMOUNT OF TAX.—The amount of the tax im-
posed by subsection (a) on any failure for any calendar 
year is the amount equal to 35 percent of the aggregate
amount of payments made by the employer on qualified 
education loans of employees for the calendar year. 
‘‘(c) COMPARABLE PAYMENTS.— 
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘comparable payments’ means pay-
ments which are— 
‘‘(A) the same amount, or 
‘‘(B) limited by the amount due under the 
qualified education loans (if any). 
‘‘(2) PART-YEAR EMPLOYEES.—In the case of 
an employee who is employed by the employer for 
only a portion of the calendar year, a payment shall 
be treated as comparable if it is an amount which 
bears the same ratio to the comparable amount (de-
termined without regard to this paragraph) as such 
portion bears to the entire calendar year. 
‘‘(d) SEPARATE APPLICATION FOR PART-TIME EM-
PLOYEES.—The requirements of this section shall be ap-
plied separately with respect to part-time employees and 
other employees. For purposes of the preceding sentence, 
the term ‘part-time employee’ means any employee who 
is customarily employed for fewer than 30 hours per week. 
‘‘(e) WAIVER BY SECRETARY.—In the case of a fail-
ure which is due to reasonable cause and not to willful 
neglect, the Secretary may waive part or all of the tax
imposed by subsection (a) to the extent that the payment 
of such tax would be excessive relative to the failure in-
volved.’’. 
(c) CLERICAL AMENDMENTS.— 
(1) The table of sections for part III of sub-
chapter B of chapter 1 of such Code is amended by 
inserting after the item relating to section 106 the 
following new item: 
‘‘Sec. 106A. Employer student loan repayments.’’. 
(2) The table of sections for chapter 43 of such 
Code is amended by adding at the end the following 
new item: 
‘‘Sec. 4980H. Failure of employer to make comparable payments on qualified 
education loans of employees.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to payments made after the date 
of the enactment of this Act in taxable years ending after 
such date. 
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