The first person that you spoke to was wrong. If your loan is discharged due to permanent disability then it is not taxable. Wisconsin follows federal law on that as @VanessaA points out. You do not need to include it as income and the amount has not been reported as income - that's what a 1099 does.
If it were taxable to your state you would have to get a loan statement showing the amount discharged and enter it on your state return as though you had received a 1099. So it's nice that you don't have to do that.
@Lrob5680
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