Tax benefit in loan payment vs bonus?

[cyanide12345678]

Do companies have any benefit in offering student loan payments vs sign on bonuses? Or are both essentially the same for CMGs/SDGs as far as their financials are concerned?

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[GeneralVeers]

Both would be taxed as income, so it doesn't matter how they pay it to you. Generally if your loan is high interest you should pay it off.

 

[cyanide12345678]

Both would be taxed as income, so it doesn't matter how they pay it to you. Generally if your loan is high interest you should pay it off.

I understand that to me it makes no difference, but does it make a difference to the company offering the bonus? I'm seeing these offers where companies are willing to offer higher loan repayments than sign on bonuses. Is it something they can write off on their taxes?

 

[GeneralVeers]

I understand that to me it makes no difference, but does it make a difference to the company offering the bonus? I'm seeing these offers where companies are willing to offer higher loan repayments than sign on bonuses. Is it something they can write off on their taxes?

I've never seen this. Can you provide an example? There shouldn't be a different tax treatment, as either way it would classify as "income".

 

[wareagle726]

I recently spoke with a recruiting company with a similar incentive package. Among the options were either $X amount in student loan repayment for each year signed vs $Y amount in direct bonus per year signed. The student loan forgiveness was about 3 times as much as the sign-on bonus.

 

[InternistDO]

I believe some states have money for loan repayment that sometimes goes through employers as opposed to being applied for directly by doctors. Could be something like that.

 

[deleted109597]

I believe some states have money for loan repayment that sometimes goes through employers as opposed to being applied for directly by doctors. Could be something like that.

Doesn't matter. Still income, still taxable.
Tennessee tried to pass a law that said anybody that went to medical school in TN had to practice in the state for 5 years after graduating residency or pay the state $100,000. It failed because the people who couldn't pay still had to pay taxes on that $100,000.

 

[cyanide12345678]

I recently spoke with a recruiting company with a similar incentive package. Among the options were either $X amount in student loan repayment for each year signed vs $Y amount in direct bonus per year signed. The student loan forgiveness was about 3 times as much as the sign-on bonus.

This is why I've been curious. I saw a few jobs which offered either a 75k sign on for a 3 year commitment or 150k loan repayment for a 3 year commitment. Could be what emergDO said, money from the state being funneled through employers

 

[InternistDO]

Doesn't matter. Still income, still taxable.
Tennessee tried to pass a law that said anybody that went to medical school in TN had to practice in the state for 5 years after graduating residency or pay the state $100,000. It failed because the people who couldn't pay still had to pay taxes on that $100,000.

Right it would still be taxable, but it might explain why hospitals are more willing to offer loan repayment, since they're getting the funding from elsewhere.

 

[deleted109597]

Different questions though. Take the most money you can get. Although 3 years seems like a long time to sign off.