PattiF
Expert Alumni

Education

No, they are not taxable in California unless you fall into one or more category outlined here:

 

  • For example, if you’ve been making IDR or PSLF payments for years and have gotten your balance down to $10,000, this amount could be discharged through Biden’s debt relief. In that case, you could be forced to pay taxes in California.
     
  • Or let’s say you were a Pell Grant recipient in college and, since graduating, you’ve been making PSLF or IDR payments and have gotten your balance down to $20,000. The Biden administration’s one-time relief could likewise clear that debt, and then you’d have state tax obligations.

@Farmboy Luke 

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