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Interesting byproduct of student loan forgiveness

DerekJohnson
DerekJohnson Administrator, Swaye's Wigwam Posts: 68,571 Founders Club
in Tug Tavern
I'm guessing Biden's loan forgiveness won't go through because of it will be shut down eventually by the Supreme Court.

If it does go through however, you will have some people getting $10,000-$20,000 in loans forgiven. Some states will view that as income and those people will need to submit a 1099. In some cases, the recipients will get bumped into another tax bracket. They will have to pay taxes and in some instances they will no longer qualify for food stamps, if they've been relying on them... Be careful what you ask for.

My suspicion though is that the Biden Admin doesn't care if it eventually gets shot down or not. They were attempting to bribe votes for this November 8th.

Awaiting Mello's downvote...
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Comments

  • Bendintheriver
    Bendintheriver Member Posts: 7,061 Standard Supporter
    Bingo. This is and always was considered a win-win=win. This was an appropriation from biden that his handlers knew would be challenged in court. He gets to brag that he was trying to give free dollars to rich kids. He gets to tell the young voters how the big bad GOP is keeping the cash from them and lastly, every socialist candidate in the country gets to go out and campaign on how the right is starving graduates.
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  • Goduckies
    Goduckies Member Posts: 8,004 Standard Supporter
    edited September 2022
    Law was passed in the covid bill that any debt forgiven until 2025 doesn't count as income.... so no 1099 will be issued.
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  • Bob_C
    Bob_C Member, Swaye's Wigwam Posts: 12,771 Founders Club
    The taxman is gonna ignore that one I hear. He’ll be at my door this time, again.
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  • DerekJohnson
    DerekJohnson Administrator, Swaye's Wigwam Posts: 68,571 Founders Club
    Goduckies said:

    Law was passed in the covid bill that any debt forgiven until 2025 doesn't count as income.... so no 1099 will be issued.

    I heard it's up to the states.
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  • WestlinnDuck
    WestlinnDuck Member Posts: 17,666 Standard Supporter
    DerekJohnson said:

    Goduckies said:

    Law was passed in the covid bill that any debt forgiven until 2025 doesn't count as income.... so no 1099 will be issued.

    I heard it's up to the states.
    It is. For Oregon, the state generally uses the federal definition of taxable income, so if it isn't taxed by the feds, it won't be by Oregon. The State legislature is free to provide exceptions to this general rule, but in this case it won't.
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