By: Economic & Finance Report
A tax burden may surface and hit students who were granted student loan forgiveness by the federal government last month (August 2022). This is dependent on the state that one lives in.
The Biden Administration granted forgiveness for over 20 million people, in student loan debt relief. Certain states have indicated they would tax the student loan forgiveness, as taxable income. These states that are included are Mississippi, North Carolina, Indiana, Pennsylvania, California; (though Pennsylvania and California) have indicated they will not collect taxable income from the student loan forgiveness program. The states that will tax the student loan debt relief as taxable income; each person in that particular state; that are deducting taxable income from student loan debt forgiveness will be taxed between $2,500 – $2,600. -SB
Image Source: Bloomberg