Competitive Workforce: Employers Benefits
The impending exodus of large numbers of baby boomers from the workforce has many organizations scrambling. Employers are both offering tuition reimbursement to prepare younger employees to succeed retirees and implementing new training programs and flexible work schedules in an effort to retain talented seasoned employees. Federal tax incentives are key to workforce investment. Section 127 under Title 26 of the IRS Tax Code currently permits employers to give workers up to $5,250 in educational assistance tax-free every year. First enacted in 1978 as a temporary provision, Section 127 has expired and been extended 11 times since. In 2001, Section 127 was extended for both graduate and undergraduate courses until 2010. According to the Society for Human Resource Management’s 2005 Benefits Survey Report, two-thirds of corporations offer some kind of tuition assistance to their employees. Congress needs to make Section 127 a permanent part of the IRS Tax Code so as to encourage employers to invest in their employees’ education and to enable employees to take advantage of such employer-provided education benefits on a tax-free basis.
