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Human Resources Desk Guide (HRDG)

Subchapter 4537 - Repayment of Student Loans
Section C - Tax Information


 


 

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Is This Part of Gross Income for Tax Purposes?

Yes, the incentive is included in the employee's gross income and in wages for federal employment tax purposes.

Your employee should contact the IRS to determine how to report this benefit and for any other tax related questions or obligations.

IRS Reporting

NFC will report payment of this incentive to the IRS.

Note: See http://www.opm.gov/flsa/oca/pay/
S
tudentLoan/HTML/QandAsTax.asp (External Site) for additional information on tax liability.

Tax Withholdings

Tax withholdings are deducted or applied at the time the loan repayment is made. Tax withholdings may not be spread out over time.

The deduction for employment tax withholding reduces the maximum loan repayment.

Example: If you grant a benefit of $6,000 and your employee's tax deductions are $2,000, then the actual loan payment to the loan institution is $4,000. However, the fully approved benefit amount of $6,000 counts toward the maximum benefit limitations.

Easing Tax Liability

In an effort to ease the tax liability to employees receiving this benefit, you may have:

  • NFC make smaller payments at periodic intervals through the fiscal year or subsequent years, rather than issue one lump sum;
  • Your employee write a check to MRP to cover the tax liability rather than have it withheld from your employee's pay check;
  Employees make the check out to: And complete: And mail the check (and form) to:
AMS USDA - AMS   USDA - APHIS / WFSB
1400 Independence Ave. SW, Room 3759S
Washington, DC 20250-3439
Attn: Management Accountant
APHIS USDA - APHIS- General APHIS Form 94 (PDF), Record of Public Funds Received USDA - APHIS - General
P.O.Box 952180
St. Louis, MO 63195
GIPSA USDA - GIPSA   USDA - GIPSA
Attn: Jerry Wadley
1400 Independence Ave. SW
Washington, DC 20250
Stop 3439
  • The appropriate amount of taxes withheld from the loan repayment benefit before issuing payment to the holder of the loan.

 

Note: Remember to advise HRO of the above method to be used.

Note: The following web sites contain the latest information from the IRS on tax liabilities and payment procedures:

 

SPO: See also NFC Bulletin, Title I, 01 - 15, dated September 21, 2001.

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