(RoyalPatriot.com )- President Biden’s latest bid to forgive student loans up to $20,000 will be taxed, according to Newsmax. Indiana became the latest among a slew of other states to confirm that they will tax the forgiven loans.
The Indiana Department of Revenue confirmed that those who qualify and decide to apply for the forgiveness will have to report the amount that they used toward their loans as taxable income, following Mississippi and North Carolina.
The current tax rate in Indiana is 3.23%, so those who qualify up to $10,000 will pay up to $323 in taxes, according to Natalie Rodriguez, the department’s communications manager. Pell grant recipients would likely pay double that at $646.
Indiana Republican House Speaker Todd Huston said that talks on the state’s tax policy will continue as they head into the next legislative session.
While a host of states aim to tax the administration’s forgiveness plan, another set of states have confirmed that they will not, such as New York, Pennsylvania, Kentucky, Virginia, Hawaii and Idaho.
Not every student is eligible for the program. Only those who have federal student loans and not considered to be high-income earners will be able to qualify, according to CNN. Individual borrowers making less than $125,000 a year and married couples or heads of households making less than $250,000 annually may see up to $10,000 of their federal student loan debt forgiven, the outlet reported.
Qualified borrowers who have Pell grants are eligible for up to $20,000 in loan forgiveness. Pell grants are reportedly offered to low-income individuals each year based on a variety of factors, including family size, income, and the cost of tuition at the college they are attending.
The Department of Education reportedly already knows the income of around 8 million students because of financial aid forms or other repayment plan applications. These borrowers will reportedly automatically receive the forgiveness if they meet the income requirements.
