Taxation on Forgiven Student Loans Expired in Louisiana, Mississippi, and Alabama
What happened
Congress allowed the policy that exempted forgiven federal student loans from federal income tax to expire. For borrowers on income-driven repayment plans, this means that forgiven debt now counts as taxable income. A report found that residents in Louisiana and Mississippi could face the steepest tax increases nationwide.
From krvs.org
Why it matters
The expiration of the tax exemption increases the federal tax burden on borrowers in the affected states. For example, a typical family of four in Louisiana or Mississippi could pay more than $7,000 in additional federal taxes and lost tax credits.
From krvs.org
Who's involved
- LouisianaState affected by the increase in federal tax liability for forgiven student loans.
- MississippiState affected by the increase in federal tax liability for forgiven student loans.
- AlabamaState ranked seventh in the analysis of tax increases for borrowers.
Who could feel it
Possible knock-on effectsThese are possibilities Brind reasoned out, not predictions, and not advice. Most are not stated in any report.
- Internal Revenue ServiceSpeculative
The Internal Revenue Service could see an increase in its tax collection mandate due to the policy change.
Keep exploring
The entities involved
-
Louisiana
state of the United States of America
-
Mississippi
state of the United States of America
-
Alabama
state of the United States of America