H.R. 4723 – Reading Mode

108th CONGRESS

2d Session

H. R. 4723

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.

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:

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:

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.