State Will Not Tax Student Debt Cancellation Programs | Pennsylvania News

HARRISBURG, Pa .– Gov. Tom Wolf announced on Friday that Pennsylvanians will not have to pay state income tax on the student loan debt relief they get from the federal student loan forgiveness program. Public Service Loans and Pennsylvania Student Loan Relief Program for Nurses.

“The point of student loan waiver programs for public servants is that these are people who have chosen jobs, often in lower paying fields, because they want to make a difference,” Governor Wolf said. “It’s wrong to take what should be a blessing and make it just another burden.

The cancellation of the student loan is not considered taxable income at the federal level, and the decision announced by the governor brings Pennsylvania in line with the majority of other states.

It also removes an immense burden on student borrowers receiving loan forgiveness in Pennsylvania by ensuring that they are not surprised with a large tax bill in the year they receive their loan forgiveness.

The SLRN program was created to help nurses in Pennsylvania who have worked tirelessly to fight the COVID-19 pandemic continue in nursing by alleviating some of the burden of student loans.

The PSLF program is a federal program that allows direct loan borrowers who make 120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer to have the remainder of their loan balance. student canceled.

Eligible employers include federal, state, local, and tribal governments, as well as 501 (c) (3) nonprofit organizations.

For example, a Pennsylvanian with $ 50,000 in student loans canceled through PSLF will avoid the unpleasant surprise of a $ 1,535 income tax bill.

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