Federal Tax, Tax

Are Forgiven Student Loans Taxable?

If you or a family member is fortunate enough to have a student loan forgiven, will the amount forgiven be taxable? Generally speaking, forgiven debt constitutes taxable income. However, certain forgiven student debt is currently exempt from federal tax through 2025. In addition, most states exempt student debt relief from their income tax, but there are some exceptions. According to a recent analysis by the Tax Foundation, forgiven student debt may be taxable in Arkansas, California, Indiana, Minnesota, Mississippi, North Carolina and Wisconsin. However, state rules on this issue are in flux, so, contact the Cg Team with questions. © 2024