Nolan Accounting Center

 

4262 South 108th Street, Greenfield, WI 53228

 

Phone: 414-425-5690

Fax:     414-425-2373


Website: www.nolanaccounting.com

December 2019

December 2019 Q & A

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Question:
My company is thinking about offering a student loan repayment benefit for our employees. How does it work?


Answer:
This benefit, which pays off anywhere from a few hundred to a few thousand dollars a year in student loan debt for employees, has grown in popularity among Fortune 1,000 companies and may make sense for smaller companies. Firms can deduct the cost for a benefit that helps attract and retain top talent, and workers may stay with employers to keep the benefit. There aren’t many rules governing this, so you might even have employees vest before getting the benefit. You might also offer an incentive for the loan repayment benefit in line with what employees put away for retirement, helping them meet another challenge.


Question:
I am receiving alimony and heard that the tax rules have changed on this income. Is it true alimony is now tax-free?


Answer:
In this case it’s much better to receive than to give, according to the IRS. If you receive alimony payments directed by an agreement that was new or suitably modified in 2019, you won’t owe federal income taxes on the amount. You may still owe local taxes on alimony and for older agreements, treating it as income for federal income tax purposes. Incidentally, pre-2019 alimony payments were tax-deductible, but not for post-2018 agreements.


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