Thank you in advance to the TurboTax community for any input on this.
I am self employed, and my one-member LLC provides consulting services to businesses (as a 1099 independent contractor). My reading of the CARES Act and IRC § 127 is that although I am considered an employee under Section 127, and therefore am eligible for § 127 educational assistance benefits , I am precluded from receiving any educational assistance (such as $5,250 tax-free student loan payment) under IRC § 127(b)(3), which provides:
"Principal Shareholders Or Owners —
I believe you are correct. The CARES act extends the tuition benefit for employees to also covering student loan payments, but the employer can't just hand out checks. They must have a qualified tuition plan in place and follow all the usual rules (no favored employees, etc.). To the extent that other cafeteria plans are disallowed for SE and 5% shareholders, this extra benefit is also disallowed.