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January 29, 2024

Yes, some people are getting student loan forgiveness, but you don't get it through filing a tax return. 

 

Normally if you have a debt, and that debt is forgiven or paid by a third party, it's a taxable event for you. The American Rescue Plan Act exempts federal student loan forgiveness from taxation at the federal level until the end of 2025. 

 

Some states are following this rule, and some aren't.

 

This includes student loan forgiveness under the following programs:

 

  • Public Service Loan Forgiveness (PSLF).
  • Income-Driven Repayment (IDR), including the IDR Account Adjustment
  • Total and Permanent Disability (TPD) Discharge.
  • Borrower Defense to Repayment for borrowers who were defrauded by their school.
  • President Biden’s one-time student loan debt relief initiative of up to $20,000, which is currently blocked by the Supreme Court. 

 

If you have student loan forgiveness from one of those programs, you shouldn't get a 1099-C to report the income. You don't need to do anything further unless you get a 1099-C that shouldn't have been received. 

 

 

 

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