To amend the Internal Revenue Code of 1986 to provide an exclusion from gross income for student loan payments made by an employer on behalf of an employee.

Amends the Internal Revenue Code to allow an exclusion from gross income of student loan payments made for an employee by an employer. Imposes upon such an employer a tax for failure to make comparable payments on certain education loans of employees.

[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4723 Introduced in House (IH)]






108th CONGRESS
  2d Session
                                H. R. 4723

To amend the Internal Revenue Code of 1986 to provide an exclusion from 
gross income for student loan payments made by an employer on behalf of 
                              an employee.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 25, 2004

   Mr. Bradley of New Hampshire (for himself and Mr. Sensenbrenner) 
 introduced the following bill; which was referred to the Committee on 
                             Ways and Means

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to provide an exclusion from 
gross income for student loan payments made by an employer on behalf of 
                              an employee.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. EXCLUSION FOR EMPLOYER STUDENT LOAN REPAYMENTS.

    (a) In General.--Part III of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 is amended by inserting after section 106 
the following new section:

``SEC. 106A. EMPLOYER STUDENT LOAN REPAYMENTS.

    ``(a) In General.--Gross income of an employee does not include 
payments made by the employer on behalf of an employee on any qualified 
education loan (within the meaning of section 221(d)) of such employee.
    ``(b) Coordination With Interest Deduction.--Any payment taken into 
account under this section shall not be taken into account under 
section 221.
    ``(c) Cross Reference.--For penalty on failure by employer to offer 
comparable payments on qualified education loans of comparable 
employees, see section 4980H.''.
    (b) Failure of Employer to Make Comparable Payments on Qualified 
Education Loans of Employees.--Chapter 43 of such Code is amended by 
adding at the end the following new section:

``SEC. 4980H. FAILURE OF EMPLOYER TO MAKE COMPARABLE PAYMENTS ON 
              QUALIFIED EDUCATION LOANS OF EMPLOYEES.

    ``(a) Imposition of Tax.--There is hereby imposed a tax on the 
failure of any employer to make available comparable payments on the 
qualified education loans of each employee of the employer for any 
calendar year.
    ``(b) Amount of Tax.--The amount of the tax imposed by subsection 
(a) on any failure for any calendar year is the amount equal to 35 
percent of the aggregate amount of payments made by the employer on 
qualified education loans of employees for the calendar year.
    ``(c) Comparable Payments.--
            ``(1) In general.--For purposes of this section, the term 
        `comparable payments' means payments which are--
                    ``(A) the same amount, or
                    ``(B) limited by the amount due under the qualified 
                education loans (if any).
            ``(2) Part-year employees.--In the case of an employee who 
        is employed by the employer for only a portion of the calendar 
        year, a payment shall be treated as comparable if it is an 
        amount which bears the same ratio to the comparable amount 
        (determined without regard to this paragraph) as such portion 
        bears to the entire calendar year.
    ``(d) Separate Application for Part-Time Employees.--The 
requirements of this section shall be applied separately with respect 
to part-time employees and other employees. For purposes of the 
preceding sentence, the term `part-time employee' means any employee 
who is customarily employed for fewer than 30 hours per week.
    ``(e) Waiver by Secretary.--In the case of a failure which is due 
to reasonable cause and not to willful neglect, the Secretary may waive 
part or all of the tax imposed by subsection (a) to the extent that the 
payment of such tax would be excessive relative to the failure 
involved.''.
    (c) Clerical Amendments.--
            (1) The table of sections for part III of subchapter B of 
        chapter 1 of such Code is amended by inserting after the item 
        relating to section 106 the following new item:

``Sec. 106A. Employer student loan repayments.''.
            (2) The table of sections for chapter 43 of such Code is 
        amended by adding at the end the following new item:

``Sec. 4980H. Failure of employer to make comparable payments on 
                            qualified education loans of employees.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to payments made after the date of the enactment of this Act in 
taxable years ending after such date.
                                 <all>