Student loan forgiveness will not be taxed in South Carolina, SCDOR says
COLUMBIA, S.C. (WMBF) – There is more good news for those who will be able to take advantage of President Joe Biden’s student loan forgiveness.
The South Carolina Department of Revenue stated that student loan forgiveness is not subject to being taxed in the Palmetto State.
In a tweet, the SCDOR stated that in May 2022, the South Carolina General Assembly adopted IRC Section 108(f)(5).
“To the extent a student described in IRC Section 108(f)(5) is forgiven for federal Income Tax purposes and excluded from federal taxable income, then the amount is also excluded from South Carolina taxable income,” the SCDOR explained.
A couple of weeks ago, Biden announced that he will cancel $10,000 in federal student loans. It applies to those who earn less than $125,000 a year, or $250,000 for couples who file taxes jointly. And Pell Grant recipients will be eligible for an additional $10,000 in debt relief for a total of $20,000 that could potentially be canceled.
To receive loan forgiveness relief, borrowers will need to fill out an application. The application is expected to be available by early October.
CLICK HERE for more information on the federal student loan forgiveness and to make sure you’re prepared.
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