UPDATE: IN Tax on Student Loan Forgiveness
melanie.negrin@iuw.org | Nov 3rd, 2022
On October 27, 2022, the Indiana Department of Revenue published updated information on how the state is taxing current Student Loan Forgiveness programs, including the Public Service Loan Forgiveness (PSLF) program and the One-time Student Loan Forgiveness program launched in October 2022. A chart published on the Indiana Department of Revenue page entitled “Why is student loan relief taxable in Indiana when the federal government does not tax it?” indicates that PSLF “income” will not be taxed at the federal or the state level. However, one-time student loan forgiveness “income” will not be taxed at the federal level, but it will be taxed at the state level. At present, Indiana is one (1) of only four (4) U.S. states considering taxation of this income.