Nontaxable Student Loan Repayments in the Web-based Special Payroll Processing System (SPPS Web)

Reference Number: NFC-20-1593604800
Published: July 1, 2020
Effective: Pay Period 12, 2020

Summary

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.

Affected Systems

Implementation

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.

Resources

For additional information, users can access the SPPS Web procedure manual. To view this procedure, select HR and Payroll Clients from the My NFC drop-down menu on the National Finance Center (NFC) Home page. At the HR and Payroll Client page, select the Publications tab and select the Manual Pay Processing publication category to access the SPPS Web procedure manual.

Inquiries

For questions about NFC processing, authorized Servicing Personnel Office representatives should contact the NFC Contact Center at 1-855-NFC-4GOV (1-855-632-4468) or via the customer service portal.