IRS Releases Q&A Guidance for Retirement Plan Student Loan Matching Contributions Under the SECURE 2.0 Act of 2022; Comments Requested
Published August 20, 2024
The Department of the Treasury (Treasury) and Internal Revenue Service (IRS) issued Notice 2024-63 as guidance for employers implementing section 110 of the SECURE 2.0 Act of 2022 (SECURE Act) which permits matching contributions for employees based on their student loan payments for plan years beginning after December 31, 2023.
The SECURE Act allows employers to make matching contributions as part of employees’ qualified student loan payments to 401(k)s, 403(b)s, SIMPLE IRA plans, and governmental section 457(b) plans.
The Questions and Answers (Q&As) detail that the plan must obtain the following information:
- The amount of the loan payment;
- The date of the loan payment;
- That the payment was made by the employee;
- That the loan being repaid is a qualified education loan and was used to pay for qualified higher education expenses of the employee, the employee’s spouse, or the employee’s dependent; and
- That the loan was incurred by the employee.
This notice applies for plan years beginning after December 31, 2024.
The Treasury Department and IRS anticipate issuing proposed regulations with further guidance on section 110 of the SECURE Act. For plan years beginning before January 1, 2025, and until the IRS guidance is issued, plan sponsors may rely on a good faith, reasonable interpretation of section 110 of the SECURE 2.0 Act.
In addition, comments for certain aspects of this guidance are requested 60 days after publication in the Federal Register.