An S-Corp can provide section 127 education assistance to the owner and it is not subject to the limits on certain other fringe benefits provided to majority owners. You can provide up to $5250 of education assistance to the employee, this normally includes tuition but for 2020 can include student loan payment assistance. You would list this as an employee fringe benefit in the corporate tax return. TurboTax should know the difference between fringe benefits that are subject to the special rules for owners and other fringe benefits that are not subject to those special rules. The loan repayment is not included on the W-2 of the employee or reported on the employee’s tax return.
