by Abby Liebing at The Western Journal
Though President Joe Biden just announced student debt forgiveness, some states may have to consider student loan debt forgiveness a taxable event, which would then detract from the promised $10,000 in debt cancelation.
When the Biden administration announced the debt forgiveness plan, it was confirmed that it would not be a taxable at the federal level for borrowers, Forbes reported.
But taxes at the state level are different and could offer a setback for borrowers in at least 13 different states, the Tax Foundation reported.
“Preliminarily, it appears that 13 states have the potential to tax discharged student loan debt, though the final count could be significantly smaller if states make legislative changes or administratively determine that the debt forgiveness can be excluded, or if conformity dates are updated retroactively,” the Tax Foundation reported.
Under the current laws for many states, the tax code typically treats forgiven or canceled debt as taxable income, according to the Tax Foundation…
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