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Employer Paid Loan Reimbursement


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Anyone know how this generally works?

My employer is offering loan repayment to the tune of 10K per year for 3 years,  but wants to apply it directly to my loan -- in other words, they pay my loan servicer directly and I never touch it. 

Curious if this is always how it's done or if there is a viable option to have the money directed to me.

I'm assuming this is some sort of write off for them? 

Thanks in advance..

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I currently receive loan repayment, also $10,000 per year, but it's until my loan is paid off (so the more loans I have the more money I'm "paid").  But the loan repayment comes to me as part of my paycheck and I'm expected to make my payments myself.  Therefore, I must turn in copies of my loan paperwork annually to show that I am making payments appropriately.

For your situation: my understanding is that any loan repayment from an employer is treated as normal income by any taxing interests (federal and most state income tax).  So whether the money goes to you or directly to your loan company it is counted as income that the business pays taxes on and income paid to you that you pay taxes on.  If the company is doing it differently somehow expect to be audited and to pay taxes on that income.  One example may be that they earmark the payments as a "gift."  It sounds nice and a perfect work-around, except that the limits on gifts to employees that are non-taxable are quite low.  For example, my mother-in-law won an iPad from her work at a Christmas party.  She literally had to include the value of that iPad on her income statement and pay income tax on it.

Edited by mgriffiths
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