Student loan debt forgiveness because of Veteran’s Total and Permanent disability status granted in 2025. Expert did not recognize the exclusion. Revisit topic?

[Elsfdoc]

NC state law provides exemption for veterans but expert missed it.

[DaveF1006]

It depends. Under the Tax Cuts and Jobs Act, student loan discharges due to Total and Permanent Disability (TPD)—including those for 100% P&T Veterans—are excluded from federal gross income. 

If this is excluded from federal income, it is not included in the federal AGI. as a result, it isn't included in your NC return because North Carolina generally follows the federal definition of Adjusted Gross Income (AGI). Even though it isn't specifically stated in the North Carolina return, it is reflected in the AGI amount in line 8 of your D-400 return.

Be sure this is excluded from federal income.  

[Elsfdoc]

While the response was helpful in my belief that I was correct, I still called the NC department of revenue to ensure that I would not have a penalty for misstating my income.  The NC DOR tax advisor did confirm that being a 100% Total and Permanently disabled Veteran did qualify as an exception to reporting the Student Loan Deference as income.

Thanks to the community for the response!