Wolters Kluwer Expert Examines the Threats to Biden's Student Loan Forgiveness Program and Analyzes the Potential State Income Taxation for Borrowers
Wolters Kluwer released insights on the impact of Biden's Student Loan Forgiveness Program, focusing on potential state income taxes for borrowers. The program, announced in August 2022 and currently on hold due to legal challenges, may see seven states imposing taxes on forgiven amounts despite federal protections against income tax. Senior Legal Analyst Anne H. Gibson provided a comprehensive analysis including eligibility and legal opposition, along with a detailed chart of state tax implications. The analysis is crucial for understanding the evolving debt cancellation landscape.
- Detailed insights on the Biden Student Loan Forgiveness Program.
- Comprehensive mapping of state taxation implications for borrowers.
- Federal protections ensure no federal income tax on debt forgiveness.
- Ongoing legal challenges could delay the implementation of the forgiveness program.
- Potential tax burdens for borrowers in states that choose to tax forgiven debt.
Senior legal analyst examines recent developments as Biden's Student Loan Forgiveness Program begins to take shape
NEW YORK, Nov. 4, 2022 /PRNewswire/ --
What: Seven states may tax student loan forgiveness under the Biden Administration program
Why: During his 2020 campaign, President Biden touted promises of student loan forgiveness, and on August 24, his administration announced that the application for debt relief was coming soon. Although the application was officially released on October 17, the program itself is currently "on hold," with no debt allowed to be forgiven until federal appeals courts, and potentially the Supreme Court, resolve ongoing challenges to the program. While the American Rescue Plan Act of 2021 (ARPA) ensures that this debt forgiveness is not subject to federal income taxes, some states are still looking to impose state income taxes.
In her new Strategic Perspective entitled "Fate of Student Loan Forgiveness Program Unclear, but State Income Tax Consequences for Borrowers Taking Shape", Wolters Kluwer Legal & Regulatory U.S. Senior Legal Analyst Anne H. Gibson offers keen insights on the program by analyzing eligibility, legal opposition, how it differs from other cancellation of debt initiatives, and how state income tax will affect it. In addition, Gibson provides a comprehensive map and chart detailing the quickly developing debt cancellation program. The map highlights states that will tax forgiven student debt, states that will not, and states that may do so. The chart breaks down each state's conformity with the IRC definition of income as well as relevant code sections.
Who: Anne H. Gibson, J.D., LL.M.
The student loan forgiveness program is sure to be a boon to many borrowers, but the one-time debt relief could result in an additional tax burden for those living in states that have chosen to tax it. Some opponents of the program have even based their legal challenges on this potential state taxation. - Anne H. Gibson, J.D., LL.M. Senior Legal Analyst
To read the full Strategic Perspective, visit: Fate of Student Loan Forgiveness Program Unclear, but State Income Tax Consequences for Borrowers Taking Shape
Contact: To arrange an interview with Anne H. Gibson, or other legal experts from Wolters Kluwer Legal & Regulatory U.S. on this or any other legal topics, please contact Linda Gharib: lrusmedia@wolterskluwer.com
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MEDIA CONTACT:
Linda Gharib
Director, Brand & Communications
Wolters Kluwer Legal & Regulatory U.S.
Tel: +1 (646) 887-7962
Email: lrusmedia@wolterskluwer.com
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SOURCE Wolters Kluwer Legal & Regulatory U.S.
FAQ
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