Posted on 08/29/2022 12:32:24 PM PDT by knighthawk
Joe Biden's student loan relief plan could trigger up to $1,100 in state-level taxes in at least 13 states because the $10,000-$20,000 in forgiveness could count toward an individual's income when filing their taxes.
Some of the states with the largest poverty levels, including Arkansas, West Virginia and Mississippi are among the states where individuals and couples could see increased tax burdens due to the student loan forgiveness.
The Tax Foundation think tank notes that 13 states currently would consider this relief income, but the states that might impose taxes on this student loan relief could shrink if legislative or administrative alterations are made.
(Excerpt) Read more at dailymail.co.uk ...
Wait a minute. Does this JUST affect those taking the loan relief? In that case, IDC.
SloJoe has opened up a crateful of rattlers with this move. Everyone who likes it would have voted Dem anyway, and the rest of us are going to tie up the Big Guy in snakeknots legally, politically, socially, and otherwise.
I’m not a popcorn guy, but I have a few gallons of keto snacks in preparation for the show.
Twice today I’ve seen reference to $20,000 as well as 10k. When did this come up?
The people taking these loan forgiveness actions are not what I would call “well informed” per Rush’s definition. They’ll put it in now, get the credit, and come tax time, they’ll be upset they don’t get much of a refund, but they won’t dig into it.
The Democrats know that the populace has a short attention span. This will all be a memory in 6 weeks.
The $20,000 has something to do with Pell Grants. I do not understand how anyone gets $$$ once they had a “grant.”
It’s all illegal anyway. Hope someone can get a judge to shut this down.
Sure hope so. It is so wickedly unfair.
Every single person whose part of this scheme should be taxed. The amount forgiven should be viewed as earned income and taxed.
It’s additional 10 grand for recipients of Pell grants.
As you and your spouse clink your champagne glasses together in a celebratory toast, you gaze at the next table over and see your neighbors also clinking their glasses together. A young twenty-something couple who just moved into the house next door to you.
You figure they are maybe there to celebrate their wedding anniversary or perhaps a promotion at work. So to be friendly, you visit their table to say hello and ask them what their special occasion is.
They happily tell you that they are also there celebrating being free of a mortgage. You see, the government just announced that they were getting mortgage relief and that they would soon have their mortgage debt wiped clean.
"It's like a load just got lifted from our shoulders," they exclaimed, "29 1/2 years of mortgage payments wiped clean - now we can afford that Hawaii vacation and get that Tesla Model 3 we've had our eyes on."
So, money does NOT just grow on trees in an endless orchard?
they can always turn it down...
That's the advice I'm giving, or at least hold off until they know what the tax implications really are (if that's an option). Just because the Dem screeching media parrots are reassuring everyone it isn't going to be taxable, that isn't the way the IRS currently sees imputed income and Pelosi may have been correct when she said in April that the President doesn't have the authority to make such decisions.
The other gotcha lurking in this is that quite a few young people are currently in the 12% federal income tax bracket, which breakpoint is around $41K taxable income IIRC. If acceptance of this $10K kicks them up into the next bracket they go from 12% to 22%, not just on that 10K but on all their taxable income, with their current withholding having likely been set at the 12% bracket. That certainly isn't a deal breaker if you know it's coming and can set money aside but it's a very nasty surprise to get when you do the books prior to next April.
I wouldn't be too surprised to see Dementia Joe and team to try to bluster this past the IRS but if it's going to take House approval they'll have to get it done ASAP. November is coming.
Ping
Being eligible for a Pell Grant signals poverty. All students no matter how wealthy the family is are eligible for at least $5500 a year in student LOANS (the richest top out at that and the interest isn’t subsidized by the government). But only the poorest are/were eligible for Pell Grants (interestingly though, keep in mind they may be wealthy NOW). That group will be offered up to $20k in loan relief because Pell grants are quite minimal and don’t cover college costs. That group takes out loans too.
They will use the HEROES act of 2003 to proclaim the relief is tax free federally. Not sure about the state taxes.
Has anyone filed suit yet? It’s been a few days since the announcement of the student loan relief and not a peep yet.
I don’t know if one group can turn it down. Of the 44 million possibly eligible, 8 million will have the relief applied automatically (without an app). The rest will have to apply with an app because the Department of Education doesn’t already know their income.
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