Just The News: Borrowers in thirteen states who have student debt canceled under the Biden administration’s plan may still be taxed hundreds of dollars next year on their forgiven loans.
President Joe Biden announced major reforms to student debt last week, including how borrowers making less than $125,000 a year (or up to $250,000 as a family) may have up to $20,000 in loans canceled for Pell Grant recipients and up to $10,000 forgiven if they did not receive a Pell Grant.
Thirteen states, including New York and Virginia, treat forgiven debt as income, which means it is subject to state taxes. This means borrowers who have their student loans forgiven may end up owing hundreds of dollars, according to an analysis published Thursday by the Tax Foundation, a nonprofit policy organization.
The Tax Foundation’s Vice President of State Projects Jared Walczak said that the maximum likely tax liability would double for those who have $20,000 in debt forgiven. For two states — New York and Wisconsin — Walczak’s analysis did not include the rare case in which the maximum tax amount would change for someone who may qualify for loan forgiveness based on 2020 earnings only to enter the top-income bracket this year. more
Just putting a political appearance patch on the problem and not addressing the long term issue. Just what politicians do most of the time, the standard optical illusion of having done something, just not a quality fix.
Its a $10,000 income in their eyes.
Anyone else remember “cash for clunkers” incentives? Yep, taxable income.
Government “rebates” on electric vehicles? May be the same, I don’t know. But you didn’t really expect government actions to live up to the hype did you?
Taxpayers need to get a class action suit going for illegal taxation or the illegal seizure and redistribution of private funds.
Or SOME legal action. It amazes me that there isn’t protesting against the king for this illegal act.
Communism runs deep through the republic.
The Immutable Law of Unintended Consequences……..
BWHAHAHAHAHAHAHAHAHAHAA………
In some states it depends on who fills out the paperwork. There are rules, but they can exercise them as they see fit.
So will the IRS.
Of course it will be taxed and as I’ve said from the start of that-guy Joe Biden’s scheme for “cancelling” debt, if his scheme is to be believed at all. Like Joe Biden the person, his “cancelling” thing is a trojan horse bringing in massive taxes and high vigs to the “cancelled” which is just one point to his swindle. The other points are to heavily tax Americans if his conspiracy manuever is actualized. The known insidious Biden will continue in his sneaky ways partly due to his intense and obsessive jealousies and the malicious putrid vindictiveness he’s known for by colleagues plus he’s (at least) aware of the fact he’s widely loathed and despised by the majority of Americans. Very similar to the parasite mean-spirited Clinton woman, Cheney, McCain et al whose quivering gelatinous bodies holds quantities of vicious jealousies and demonic spite.
That’s if the loan cancellation even happens.
Hopefully SCOTUS will blow this expensive pandering bullshit right back to hell/DC where it belongs.