MANPAY 20-03, Nontaxable Student Loan Repayments in the Web-based Special Payroll Processing System (SPPS Web)
Published: July 1, 2020
Effective: Pay Period 12, 2020
SPPS Web is being modified to process employer contributions for student loan payments as nontaxable as a result of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was approved on March 27, 2020. This will be nontaxable for both employer payroll purposes and employee income tax purposes.
Modified to allow users to process student loan payments as non-taxable.
Currently, student loan payments are processed as taxable in SPPS Web. Users can continue to process student loan payments as taxable but will need to keep track of both taxable and nontaxable amounts to ensure they do not exceed the maximum amount allowed per calendar year. Nontaxable and taxable student loan payments must be processed as separate payments and cannot be combined.
The nontaxable student loan amount cannot exceed $5,250 per year and can be processed any time after March 27, 2020, through December 31, 2020. The nontaxable student loan repayment plus taxable student loan repayment amounts cannot exceed the Agency allowable amount per calendar year.
For additional information, users can access the SPPS Web procedure manual. To view this procedure, selectfrom the drop-down menu on the National Finance Center (NFC) Home page. At the HR and Payroll Client page, select the tab and select the publication category to access the SPPS Web procedure manual.
For questions about NFC processing, authorized Servicing Personnel Office representatives should contact the NFC Contact Center ator via the customer service portal.