Thanks for the reply.  The original loan was for college education and it appears they meet the requirements of the CARES Act for this repayment to not be taxable to the employee.  The employer even lists the repayment as an educational assistance loan repayment on the year-to-date payroll summary as a deduction, but it is still included in gross pay in box 1 of the W-2.  I just don't see a place to offset the inclusion of the $1,000 included in earnings.