I plan to apply for the upcoming loan forgiveness/support put out by the Biden Administration. IF I qualify I expect to get $10k in support to help down off my college loans. Will I be taxed for this and have to pay come next April?
Hello! Great question.
The student loan forgiveness will not be federally taxable. Student loan forgiveness under ARPA is exempt from federal income tax.
Certain states may not conform to this provision of ARPA and could potentially subject your forgiveness to state income tax. This area of law could be subject to certain updates, so I would recommend continuing to monitor news from your state department of revenue.
This link gives a list of certain states where the forgiveness could potentially be taxable. As I said, this is by no means final. Continue to watch this space up to the filing date of your tax returns next year.
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