IRS issues updated FAQs regarding educational assistance programs
Updates reflecting amendments under OBBBA
The U.S. Treasury Department and IRS today released FS-2026-10, containing updated FAQs regarding educational assistance programs.
As explained in a related IRS release—IR-2026-55 (April 20, 2026)—an employee’s gross income does not include benefits provided under a section 127 educational assistance program, up to $5250 per calendar year. The “One Big Beautiful Bill Act” (OBBBA) amended section 127 to index the $5250 cap for inflation for tax years after 2026 and also made certain other changes.
The updated FAQs, which supersede the FAQs previously issued in FS-2024-22, provide revised information about educational assistance programs generally (including how the rules apply to certain qualified education loans), updates related to the OBBBA amendments, and a modified sample plan.