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ARTICLE · 20 APRIL 2026

IRS Revises FAQs On Educational Assistance Programs

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The IRS has updated its guidance on educational assistance programs under Code section 127, clarifying key timing requirements for expense reimbursements and student loan payments. These changes address long-standing questions about when employers can provide tax-free educational benefits and how the recent One Big Beautiful Bill Act affects annual contribution limits.

United StatesEmployment and HR
Katie Bjornstad Amin
Katie Bjornstad Amin
William Fischer
William Fischer
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On April 20, the IRS issued Fact Sheet 2026-10, which provides FAQs about educational assistance programs and an updated sample program document. This fact sheet supersedes the IRS’ 2024 FAQs in Fact Sheet 2024-22. See our prior alert here.

As background, under a Code section 127 educational assistance program, an employer can provide up to $5,250 per year in tax-free qualified education benefits to employees. These benefits include tuition, fees and similar expenses, books, supplies, and equipment. Effective March 27, 2020, these benefits also include principal and interest payments on qualified education loans (“Student Loans”). Recently, the One Big Beautiful Bill Act (“OBBBA”) made the Student Loan provision permanent and, beginning in 2027, indexed the $5,250 annual limit.

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