This page can be found on the web at the following url: http://www.opm.gov/FAQS/QA.aspx?fid=e64d74ab-20a3-484c-8682-d2a2b46c22da&pid=eed9f44d-dec0-4e35-a399-0fd6e344f96c
Yes. The repayment is includible in the employee's gross income and in wages for Federal employment tax purposes, notwithstanding the agency's repayment of the loan directly to the lender. This answer was provided by the Internal Revenue Service (IRS). For further guidance/clarification on this issue, agency representatives may contact IRS (Federal, State and Local Governments) at (202) 283-9665.
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