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Section 127 plan document

Section 127 plan document template 2026

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The document outlines a sample Section 127 Educational Assistance Plan for FCA Dealers, designed to provide educational benefits to eligible employees through Strayer University. It establishes the plan's purpose, eligibility criteria, covered costs, and tax implications while emphasizing that it is a sample document requiring legal review before implementation. The plan allows employees to receive up to $5,250 in educational assistance per year, excluding certain costs and ensuring compliance with federal regulations.

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Click ‘Get Form’ to open the Section 127 Plan document template in the editor.
Begin by entering the full legal name of your dealership in the designated field at the top of the document. This personalizes the plan and ensures it is specific to your organization.
In Article I, clearly outline the establishment date of your plan by filling in the calendar year where indicated. This establishes when your educational assistance program becomes effective.
Proceed to Article II and specify any relevant details about education courses offered through Strayer University. Ensure that you include any limitations or changes that may apply.
In Article III, identify eligible employees by detailing criteria such as full-time status and minimum hours worked for part-time employees. This ensures clarity on who can benefit from the plan.
Review Articles IV through VIII carefully, making necessary modifications based on your company’s policies and legal requirements. Pay special attention to tax implications and administrative responsibilities outlined in these sections.

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What is a section 127 plan?

Tax-free educational assistance benefits under a section 127 educational assistance program include payments for tuition, fees and similar expenses, books, supplies and equipment. The payments may be for either undergraduate- or graduate-level courses. The payments do not have to be for work-related courses.

What does IRC section 127 allow small business owners to do?

A Section 127 plan allows employers to assist their employees with student loan payments and is a great fringe benefit to take advantage of.

How does a section 127 plan work?

Under section 127, the total amount that an employee can exclude from gross income for payments of principal or interest on qualified education loans and other educational assistance combined is $5,250 per calendar year.

How do I set up a section 127 program?

Section 127 Program To qualify under 127, a program must: Have a written plan document. Not provide more than 5 percent of its total annual benefits to individuals who own more than 5 percent of the companys stock.

What is section 127?

Section 127. Onerous gifts. Previous Next. Where a gift is in the form of a single transfer to the same person of several things of which one is, and the others are not, burdened by an obligation, the done can take nothing by the gift unless he accepts it fully.

sample section 127 plan document

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What is Section 127 of the Secure Act?

Section 127 of the SECURE 2.0 Act provides for the creation of Pension-Linked Emergency Savings Accounts (PLESAs) effective for plan years beginning after December 31, 2023.

What must be included in a Section 125 plan document?

These benefits include premium-only plans, flexible spending accounts, simple cafeteria plans, and full-flex cafeteria plans. Section 125 plan documents should include information about the plan year, available benefits, eligibility, and the process for making pre-tax elections.