The Internal Revenue Service (“IRS”) has issued its first round of guidance on Section 110 of the Setting Every Community Up for Retirement Enhancement 2.0 Act of 2022 (“SECURE 2.0”) that adds an optional student loan match provision to 401(k) plans (and certain other plans). The guidance is set forth in Notice 2024-63 and applies beginning next year, although plans can add the provision beginning this year (2024). This is the first official guidance on the concept that was first introduced through LTR 201833012, which allowed an employer to provide a nonelective contribution for student loan repayments (in lieu of a matching contribution). Under SECURE 2.0, the student loan match is treated as a true match, which is intended to simplify the coverage and nondiscrimination testing, but there are parameters that must be complied with to fall within this provision.
In this TAXES – The Tax Magazine article, “IRS Issues Student Loan Match Guidance — Save for Retirement While Repaying Student Loans,” Groom principals Elizabeth Thomas Dold and David Levine break down guidance issued by the IRS on qualified student loan payments. Dold and Levine answer frequently asked questions regarding the guidance and offer next steps for plan sponsors and recordkeepers.
To read the article, click here.
