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SHRM Newsletter: Federal Legislative Action Alert

03/07/2012

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March 7, 2012

This is Utah SHRM Legal-mail no. 2012-6 prepared for Salt Lake SHRM, the Human Resources Association of Central Utah (HRACU), the Northern Utah Human Resources Association (NUHRA), the Color Country Human Resources Association (CCHRA), the Bridgerland Society for Human Resource Management and Utah at-large members of the national Society for Human Resource Management (SHRM). 

CONTENTS:

NATIONAL SHRM Federal Legislative Action Alert

YOUR ASSISTANCE IS NEEDED!  Save Employer Provided Education Assistance! Please email or write your representative and ask him/her to co-sponsor the Employee Educational Assistance Act of 2012, H.R. 4137, introduced by Representatives Sam Johnson (R-TX) and Richard Neal (D-MA).  H.R. 4137 will make employer provided education assistance (Section 127 of the Internal Revenue Code) a permanent provision.

Please Take Action:
Ask your Representative to co-sponsor the Employee Educational Assistance Act of 2012, H.R. 4137 using SHRM’s HRVoice program by following these steps:

  1. Log onto the SHRM Advocacy Action Center by clicking HERE
  2. Personalize your message with your own story
  3. Be sure to include your complete home mailing address.

Background
Section 127 of the Internal Revenue Code allows an employee to exclude from income up to $5,250 per year in assistance provided by their employer for any type of educational course at the associate, undergraduate and graduate level. Employers are not required to provide assistance under Section 127 to their employees. However, if an employer chooses to do so, the benefit must be offered to all employees on a nondiscriminatory basis that does not favor highly compensated employees. Congress has extended Section 127 nine times since it was created in 1978, most recently in 2010. Section 127 will expire at the end of this year unless Congress acts to renew it or make it permanent.

Issue
Providing tax-free educational assistance is an important tool for employers. Section 127 helps to build and maintain an increasingly skilled workforce, and positions the United States to remain competitive in the global economy. Almost 20 percent of Section 127 recipients are pursuing science, technology, engineering and mathematics (STEM) degrees. More than 35 percent of all degrees pursued by Section 127 beneficiaries are master’s degrees, and, according to the National Postsecondary Student Aid Study of the most recent data, use of Section 127 benefits has doubled since 1994. Today, more than 1 million employees use Section 127 benefits.

Status
Over the past few years, there have been several attempts to make Section 127 benefits permanent. Attempts to extend or make permanent any tax reductions will be difficult in the current political environment due to concerns about the rising federal deficit. An extension of Section 127 would likely need to be part of a larger tax reform package. Until a larger package comes together, SHRM supports the Employee Educational Assistance Act of 2012, H.R. 4137.

SHRM Position
SHRM chairs the Coalition to Preserve Employer Provided Education Assistance, a broad-based collection of groups representing business, labor and education groups. SHRM strongly supports the permanent extension of Section 127 for associate, undergraduate and graduate degrees. We believe that providing tax-free educational assistance is an important tool for employers to attract the best employees, build a skilled workforce and position the U.S. economy to compete globally.

Should you have any questions regarding this resolution, please contact Kathleen Coulombe, SHRM’s Senior Associate, Government Relations at kathleen.coulombe@shrm.org.

Written by: Employment Attorney, Michael Patrick O'Brien
Utah State and Salt Lake SHRM legal director
Email: mobrien@joneswaldo.com
Phone: 801-534-7315
Website: www.joneswaldo.com

Legal-mail is a legal and legislative update service sent out about twice a month to various Utah SHRM members and chapters. As a courtesy to SHRM, the Utah law firm of Jones Waldo Holbrook & McDonough P.C. underwrites the costs of the service. If you have any questions or comments, please contact Michael Patrick O'Brien.

Disclosure: These updates are merely updates and are not intended to be legal advice. Receipt of this information does not create an attorney-client relationship.