How do I enter student loan forgiveness using Turbo Tax? I did not get a 1099-C because it's exempt federally but Arkansas requires it to be taxed as other income.

Per the State of Arkansas, page 11, Under current Arkansas law, the amounts discharged under the Public Service Loan Forgiveness (“PSLF”) program should be excluded from gross income.

Unfortunately mine wasn't under PSLF but part of the SAVE plan where students with lower balances were forgiven on a shorter timetable. My state does tax this as income and there is also a $150 credit from my state of you make under $90,000 towards what I'd owe. I'm guessing Turbo Tax doesn't have that set up, but thank you anyway! 

I can offer a workaround.

• I can see it on the form AR- OI on line 8 but using the desktop program, I have to use forms mode and can enter it.
• Using the online program, it needs to be entered in the federal and subtracted back out.

Desktop version:

Switch to Forms mode and enter the 1099-C / student loan income.

 

Online:

1. File the correct federal return
2. Save a copy of your return
3. Once it is accepted, add the 1099-C
4. File the state

I am using Turbotax Live Premium. Will I have to delete the state return before filing the federal return or is there a way to save it for later and then make the changes after the federal return is accepted?

 

Thank you.

No, you don't need to delete the state return. You can file the federal return without filing the state return.