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Board establishes IRC §127 educational assistance program to deliver grant-funded loan relief
Summary
The board approved creation of an educational assistance program under Internal Revenue Code §127 to deliver roughly $45,000 in grant-funded educational assistance, allowing up to $5,250 of tax-free assistance per eligible employee; administration said 11 employees are currently participating.
The Redford Union Schools Board of Education voted Sept. 9 to create an educational assistance program under Internal Revenue Code §127 to administer grant-funded loan-repayment assistance for qualifying employees.
The district’s finance staff told the board it received a one-time grant payment of about $45,000 late last year to support educational assistance. The proposed §127 plan would allow eligible employees to receive up to $5,250 of educational assistance tax free; administration reported 11 active participants and said the first payments are scheduled to be included on the Sept. 28 payroll. The CFO emphasized that this is grant-funded assistance only and does not create an ongoing district-funded benefit.
The chief financial officer described the §127 plan as a protective measure so the district does not carry the payroll-tax burden for these benefits; without the plan the district would be "on the hook" for taxes. Board members praised the assistance as a benefit for early-career teachers and approved the program by roll call.
Next steps: administration will finalize the §127 plan documents and coordinate payroll adjustments to deliver the grant-funded payments to eligible employees.
