student loan refunds for covid in anticipation of loan forgiveness.

Forum|Forum|3 years ago
March 20, 2023
1 reply
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I am dealing with interest paid (now refunded) on student loans and previously used in 2020-2021 taxes already. So I am asking about correcting or amending those tax years (see other posts) regarding interest only. I think to add that interest to 2022 income is incorrect as someone suggested.

However, some here are asking about the total refund amounts and does that count as income for 2022. The answers to that question I saw were referring to the pending Biden loan forgiveness and how congress is treating that for tax purposes if it comes to be (as well as states). This is debt forgiveness not a refund. The questions are about refunds we already received. My opinion is that the refunds should not be taxed now as we paid the loans previously with after tax money. So that would be taxing twice if the refunds were treated as income now.

BrittanyS

Correct, if you receive a refund of payments made to your student loans, the refunds are not taxable. Refunds are different from student loan debt forgiveness. Normally, Student Loan Forgiveness can be taxable. However, under the American Rescue Plan, it has been determined that the student loans forgiven would not be considered taxable.

For more information about the American Rescue Plan, see the link below:

American Rescue Plan

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