The following blog is written by Amy Sherman, associate vice president for policy and strategic alliances at the Council for Adult and Experiential Learning (CAEL). CAEL shares many of the goals of Encore.org, including making it easier for adults to get targeted education and training when transitioning to their encore careers. Click here to see the original posting and here to learn more about CAEL.
Whatever you think of the deal to avoid the “fiscal cliff,” working learners have real cause for celebration. As a part of the American Taxpayer Relief Act of 2012, Section 127 of the IRS Code, which excludes up to $5250 of employer-provided education benefits from an employee’s taxable income, will be made a permanent provision. After nine extensions of Section 127, typically at the last minute, now employers and employees can finally count on this important tax incentive.
Section 127 makes good policy because it gives employers an incentive to invest in their employees’ education while maximizing the value for employees by keeping it tax-free. Workers have noticed its advantages. According to the Coalition to Preserve Employer Provided Education Assistance, almost one million employees relied on Section 127 in the 2007-08 academic year. And these were not just highly compensated individuals - the average income of Section 127 beneficiaries was about $42,000. These working learners have little else in the way of financial assistance to pursue their own undergraduate and graduate education, except to go into debt. Section 127 helps such employees access the education they need to stay competitive. In doing so it benefits everyone because it helps to build a stronger workforce.
Good policy doesn’t happen by itself - it requires patience, persistence and pulling together. It has taken years of effort by a large and diverse group of coalition partners, including CAEL, to help move Section 127 from a temporary measure to the law of the land. On behalf of the many adult learners who depend on Section 127, congratulations and thanks to everyone who worked so hard to make this important tax policy permanent law.