A provision in the 2021 American Rescue Plan Act, student loan forgiveness will not be taxable even if you receive a refund for federal tax purposes.
However, some states may require tax to be paid on the canceled loan debt. Currently, Arkansas, Hawaii, Idaho, Kentucky, Massachusetts, Minnesota, Mississippi, New York, Pennsylvania, South Carolina, Virginia, West Virginia, and Wisconsin have the potential to tax forgiven student loans.
For more information, see the link below:
Student Loan Forgiveness
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