Here’s what President Biden’s student loan forgiveness means for your taxes – By Kate Dore & Annie Nova (CNBC) / Aug 24, 2022
- Borrowers who will benefit from student loan forgiveness won’t need to worry about getting hit with a federal tax bill.
- But they may owe state taxes on the forgiven debt.
- Here’s what you need to know.
If you’re poised to benefit from President Joe Biden’s up to $20,000 in student loan forgiveness, you may also be wondering if the erased debt will trigger a tax surprise come April.
The short answer is: It won’t, at least on your federal tax return.
Biden on Wednesday announced that he will forgive $10,000 in federal student debt for most borrowers, limited to borrowers making less than $125,000 per year, or $250,000 for married couples filing together or heads of households.
He will also cancel up to $20,000 for Pell Grant recipients, Biden said in a tweet.
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