@jeff4130 wrote:
If the employer loan repayment was issued directly to me, and I did not use it on student loans, will I get penalized for that?
It would be considered part of your taxable income and should be included on your W-2 wages and subject to social security and Medicare withholding. There is no other specific penalty for you, however, your employer could be subject to penalties if they are audited, for failing to use proper controls on the loan program and issuing you an improper non-taxable payment. You should contact the employer, explain that you did not use the funds as promised, and ask for a corrected W-2 that includes the money as wages.
