Minneapolis — President Joe Biden’s student loan forgiveness plan could lift crushing debt burdens from millions of borrowers. But in some states, the tax man may demand a cut of that relief. That’s because some states tax forgiven debt as income. And that means borrowers who are still paying down student loans could owe taxes on as much as $10,000 or even $20,000 that would count as income.
In Mississippi, Minnesota, Wisconsin, Arkansas and North Carolina, forgiven student loans will be subject to state income taxes unless they change their laws to conform with the federal exemption. That’s according to a tally by the Tax Foundation.
Source: Nebraska Regional News