Last updated on 2022-10-24
Alrighty American friends we’re digging deep into a popular question our research team has received ever since Biden’s student loan application went live. Many have asked if they’ll get taxed like media reports and claims by right-wing complainers claim however that just isn’t true (not entirely anyway.)
Ironically, only 7 known states would actually tax people according to their tax codes for accepting such forgiveness. Despite what the right says, none of those states (but one) are largely led by Democrats but instead Republicans except for one. According to NBC News, those states are as follows: Arkansas, California, Indiana, Minnesota, Mississippi, North Carolina and Wisconsin.
California has already made it clear their tax code will be updated in the coming future and residents can expect not to be taxed if they accept forgiveness. It is unclear if the other states would follow at this time.
This is because these states haven’t got their tax code up to date yet. That means that according to their current tax code you would be taxed though this does not apply to other places including New York State.
According to one tax analyst, these codes do not specifically target student loans however they are a bigger part of codes that target debt forgiveness. If the named states don’t update their code — then yes tax bills will follow. Federally, the government does not intend to tax people for such relief despite many misleading claims by the right.
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