Indiana became the latest state Tuesday to confirm that it will tax student loan forgiveness, AP reports.
Why it matters: As the Biden administration sets out to implement its sweeping student loan forgiveness plan, some states have indicated that residents could face a state tax on the balances forgiven. Mississippi and North Carolina previously confirmed that forgiven student loans are considered taxable income.
Driving the news: Indiana's tax rate is currently 3.23%, meaning those eligible to have their debt canceled will pay up to $323 or $646 in taxes depending on the amount of student loan forgiveness they qualify for, per AP.
Why it matters: As the Biden administration sets out to implement its sweeping student loan forgiveness plan, some states have indicated that residents could face a state tax on the balances forgiven. Mississippi and North Carolina previously confirmed that forgiven student loans are considered taxable income.
Driving the news: Indiana's tax rate is currently 3.23%, meaning those eligible to have their debt canceled will pay up to $323 or $646 in taxes depending on the amount of student loan forgiveness they qualify for, per AP.
- Residents will also have to pay county taxes for the forgiven balances.
- Relief would largely depend on each state's legislature.
- Indiana House Speaker Todd Huston (R) told AP he expects conversations about the state policy "to continue as we head into the next legislative session," which will begin in January.
Indiana the latest state to confirm it will tax student loan forgiveness
Residents will pay up to $323 or $646 in state taxes depending on the amount of debt cancelled.
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