Student loans

Forum|Forum|6 years ago
March 28, 2020
4 replies
15 views

The new coronavirus relief bill pass States lenders cannot deduct from Federal Tax Returns. Does that count all 2019 tax returns? Or is there a cutoff.

Not A Product Question

Critter

Level 15

Student Loan Payment Relief

Under the CARES Act, employers can still make student loan payments on behalf of their employees on a tax free basis, up to $5,250 annually. This means the loan payments would be excluded from the employee’s income. The provision is applicable on loan payments an employer makes from the day the bill was signed into law (March 27, 2020) through Jan. 21, 2021.

https://blog.turbotax.intuit.com/tax-news/what-the-coronavirus-covid-19-stimulus-bill-means-for-your-taxes-46623/

Critter

Level 15

https://www.msn.com/en-us/news/us/federal-student-loan-payments-to-be-suspended-for-six-months/ar-BB11OpzJ

DawnC

Level 15

Your stimulus payment can't be offset for student loans. You will receive it whether or not you are in default on your student loans.

The Act suspends all involuntary collection of defaulted Direct Loans and Department-owned FFEL loans until September 30, 2020. This explicitly covers non-judicial wage garnishment, tax offsets, and federal benefit offset (e.g., seizure of Social Security benefits). There is also a catch-all provision to cover other types of involuntary collection by the Department of Education.

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NCperson

Level 15

the critical part of the question is the 'cutoff'.

if your tax return refund settled after March 26 (the date the law was signed), your refund won't be garnished to lower your student loan delinquent debt

however, if the refund settled prior to that date, it can be garnished and will not be undone.