Is there a tax
on student loan forgiveness?
If you live in these states, the answer is yes.
States that tax student loan forgiveness:
Arkansas. Indiana, Mississippi,
Federal law exempts student loan forgiveness from federal taxes.
But some states have their own tax laws.
If you live in a state that taxes student loan forgiveness, you may owe taxes on the amount forgiven.
This could add thousands of dollars to your tax bill.
You should consult with a tax advisor to determine your specific liability.
How much tax you owe will depend on your state's tax laws and your income.
But for now, borrowers in these states should be aware of the potential tax liability.
There are some states that are considering exempting student loan forgiveness from state taxes.
Talk to a tax advisor to get personalized advice.
If you are eligible for student loan forgiveness, it is important to understand the tax implications.
But it is important to be aware of the potential tax implications before you accept it.
Student loan forgiveness can be a life-changing event.