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amyldodge
New Member

Can you deduct what your employer paid you for your student loan if paid as an extra paycheck?

My employer paid $5000 towards my student loan is that deductible for me? Some sites say yes but TurboTax says enter the amount that exceeds 5250?
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2 Replies
Hal_Al
Level 15

Can you deduct what your employer paid you for your student loan if paid as an extra paycheck?

Q. Can you deduct what your employer paid you for your student loan?

A. No.

 

Q.  Can you deduct what your employer paid you for your student loan if paid as an extra paycheck?

A. No.

Student loan payments are not deductible, no matter how they were paid. But the first $5250 of employer payments are tax free. 



 

KrisD15
Expert Alumni

Can you deduct what your employer paid you for your student loan if paid as an extra paycheck?

It depends.

 

Your employer can "Gift" you up to 5,250 for paying student loans or tuition fees. 

If they "gift" it, the amount won't be included on your W-2 as income, it would NOT be included in Box 1 of your W-2 (although there could be a notation of it in Box 14) 

 

So if your employer gave you/paid you 5,000 towards paying student loans, 

 

if the amount is NOT included as wages, you are not paying tax on that 5,000 so you cannot deduct it from your income (it isn't in your income) and you can't claim any interest that was paid on the student loans. 

 

if the amount IS included as wages, you still cannot deduct 5,000 from your income HOWEVER you CAN claim the student loan interest paid which would be reported to you on Form 1098-E if at least 600 in interest. 

 

@amyldodge

 

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