Will your $10K-$20K of student loan forgiveness come with a tax hit?

[1srelluc]

2021 federal legislation means you don’t have to pay federal income tax on your forgiven student loans, but a state income tax bill could still be in your future​

If you’ll receive $10,000 or $20,000 in federal student loan forgiveness thanks to President Joe Biden’s announcement on Wednesday, Aug. 24, you won’t have to pay federal income taxes on that amount.


In March 2021, Congress approved the American Rescue Plan Act, COVID-relief legislation that — among other provisions — excludes forgiven federal student loans from taxable income through 2025.

Why you won’t have to pay federal taxes on student loan forgiveness​

The American Recovery Act excludes from gross income any amount of federal student loans forgiven for any reason between Dec. 31, 2020, and Dec. 31, 2025. That includes:

• Amounts forgiven under the Public Service Loan Forgiveness Program
• Teacher or healthcare loan forgiveness programs
• Income-driven repayment plans (after making 20 years of on-time payments)

The act also applies to the broad-scale forgiveness announced by the Biden administration. So if your 2022 gross income is $75,000, and you received $10,000 in forgiveness, when you file your federal taxes next year, you’ll only need to report (and pay taxes on) $75,000 of gross income — not $85,000.


Will your $10K-$20K of student loan forgiveness come with a tax hit?

Oh look, now the privileged little shits won't even have to worry about those 85K new IRS agents coming after them.....Small wonder the cost has climbed to 1 Trillion.

 

[Penelope]

2021 federal legislation means you don’t have to pay federal income tax on your forgiven student loans, but a state income tax bill could still be in your future​

If you’ll receive $10,000 or $20,000 in federal student loan forgiveness thanks to President Joe Biden’s announcement on Wednesday, Aug. 24, you won’t have to pay federal income taxes on that amount.


In March 2021, Congress approved the American Rescue Plan Act, COVID-relief legislation that — among other provisions — excludes forgiven federal student loans from taxable income through 2025.

Why you won’t have to pay federal taxes on student loan forgiveness​

The American Recovery Act excludes from gross income any amount of federal student loans forgiven for any reason between Dec. 31, 2020, and Dec. 31, 2025. That includes:

• Amounts forgiven under the Public Service Loan Forgiveness Program
• Teacher or healthcare loan forgiveness programs
• Income-driven repayment plans (after making 20 years of on-time payments)

The act also applies to the broad-scale forgiveness announced by the Biden administration. So if your 2022 gross income is $75,000, and you received $10,000 in forgiveness, when you file your federal taxes next year, you’ll only need to report (and pay taxes on) $75,000 of gross income — not $85,000.


Will your $10K-$20K of student loan forgiveness come with a tax hit?

Oh look, now the privileged little shits won't even have to worry about those 85K new IRS agents coming after them.....Small wonder the cost has climbed to 1 Trillion.

There is no tax hike, except what tramp did to decrease taxes.

 

[1srelluc]

There is no tax hike, except what tramp did to decrease taxes.

 

[rightwinger]

tax free

 

[Biff_Poindexter]

Did you ask if all of those PPP loans would come with a tax hit?

Oh nevermind, those weren't loans...they were grants........since the same folks whining about student loan debt never had to a pay dime for those PPP loans......at least the hardworking Americans who are benefiting from student loan relief were at least PAYING BACK those loans.....

 

[Penelope]

View attachment 689129

except what tramp did to decrease taxes.

I said that.