Private student loans forgiven, received 1099C forms, how does American Rescue Act work?

[Rborg12]

Hello,

I was shocked to find out discover student loans had been forgiven back in October without any real reason. But I received a stack of 1099-C forms for each forgiven loan. Under the American rescue act I live in a state that doesn’t require taxes to be paid on forgiven loans. 

When filing my taxes, do I just not apply those forms? What do I need to do? I certainly cannot afford the tax bomb this will give me if I have to pay any taxes on a $150,000 loan.

Thanks!

[Vanessa A]

The loans are not considered taxable income so you do not need to include the 1099-C on your return. 

The American Rescue Plan Act includes a provision temporarily modifying the tax treatment of forgiven or discharged student loan debt. Specifically, the law excludes from gross income any qualifying student loans that are discharged between Dec. 31, 2020, and Jan. 1, 2026. During this period, forgiven student loan debt won’t be subject to federal taxation. How will a student loan payment count adjustment affect my taxes?