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Employee loans: Are they reportable or not?

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in Office Management,Payroll Management

Question: Our company makes interest-free loans to employees so they can buy home computers. The purpose of the loan program is to allow employees to hone their computer skills. Employees can take up to four years to repay their loans. Must we report the loans on their W-2 forms?

Answer: No. The type of loan you describe doesn’t need to be reported. What must be reported: the imputed interest. That is, the difference between your interest rate and market-rate interest must be reported if at least $10,000 is lent from an employer to an employee.

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