North Carolina says it will tax Biden's student loan forgiveness, and 3 more states are likely to follow suit

[DigitalDrifter]

Does this surprise anyone?

• Student loan forgiveness is taxable income in North Carolina, the state's Department of Revenue confirmed.
• The Biden administration's student loan forgiveness plan is exempt from federal tax.
• The debt relief is triggering individual state taxes in North Carolina and Mississippi.

Student loan forgiveness will be considered taxable income in North Carolina, the state's Department of Revenue said on Wednesday.

Although the Biden administration's student loan forgiveness plan is exempt from federal tax, the debt relief is still triggering some individual state taxes.

In North Carolina, student loan relief is taxable because the state has not fully adopted a specific Section of the Internal Revenue Code. Congress used the provision — Section 108(f)(5) — to exempt forgiven student loans between 2015 and 2021 from tax as part of the American Rescue Plan Act.

North Carolina says it will tax Biden's student loan forgiveness, and 3 more states are likely to follow suit

 

[pknopp]

Republicans have to get their taxes........well, on the people they do.

 

[occupied]

It not at all surprising that republicans are ruled by spite.

 

[pknopp]

I'm wondering now if GM was on the hook to pay taxes on the millions that they had forgiven?

 

[DigitalDrifter]

Under current state laws, it's taxable until they formally adopt an exemption. Republicans (like me) are against the student freeloader bailout, so why would any Republican led state legislature make it any easier for the freeloaders?

 

[Canon Shooter]

It not at all surprising that republicans are ruled by spite.

Why shouldn't the amount forgiven be treated as income?

 

[TNHarley]

I had a debt forgiven a long time ago. Something about interest was messed up or something. I had to amend my tax return and pay in a thousand dollars because it counted as income.
Why should these people get off without it?

 

[Superbadbrutha]

Did they tax PPP loans that were given by Trump?

 

[Silent Warrior]

Taxing loan forgiveness of any kind is pretty common. Many states tax a borrower for the amount a bank writes off their loan when they settle for a lesser amount. Let's face it. If you owe $10k and the bank writes it off it is as if you had an additional $10k in income.

 

[iamwhatiseem]

The SCOTUS has suspended the loan forgiveness for now, as it violates the authority of the executive branch.

 

[Ame®icano]

Did they tax PPP loans that were given by Trump?

Loans are not taxable.

 

[Ame®icano]

The SCOTUS has suspended the loan forgiveness for now, as it violates the authority of the executive branch.

As it should be. And it wasn't SCOTUS but U.S. appeals court.