State of Michigan - Student loan discharge for tot...
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Level 1

State of Michigan - Student loan discharge for total and permanent disability

I receive disability, ssdi, I was just approved for a student loan discharge for total and permanent disability. The papers they sent me said the discharge amount will not count as income on federal taxes but may on state. Does anyone know I will have to pay taxes on it in Michigan? I have been trying to find it online and the state of Michigan website but can't find it. I am not a veteran. 

 

Also IF it is going to be taxed does anyone know if my dad can claim me as a dependent on his tax return still? I haven't filed taxes for myself in 18 years. I live with him and he has helped me out financially alot and is allowed to claim me right now

 

One last question. Sorry this is so long. If I do owe state taxes on it do I owe them this year or in 3 years when it's official? They require you to wait three years until the discharge is complete in case your medical/financial situation changes

 

Thanks for your time and any answers and help

 

 

2 Replies
Level 14

State of Michigan - Student loan discharge for total and permanent disability

Michigan's income tax calculation starts with your federal adjusted gross income (AGI).  Since your disability discharge amount is not included in your federal AGI, it would follow that it will not be taxed by Michigan.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.**

Level 1

State of Michigan - Student loan discharge for total and permanent disability

Thank you Tom! Appreciate the response

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