Newsom calls for quick action to waive taxes on canceled student loan debt

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Governor Newsom called on the Legislature on Saturday to take swift action to ensure that any federal student debt relief provided to Californians would not be subject to state taxes. with taxes for it. This will provide up to $1.3 billion in tax relief to more than 3.5 million Californians. “Of the 3.5 million eligible borrowers in California, 2.3 million are Pell Grant borrowers, and could save up to $1,860. Under President Joe’s debt relief proposal Biden, the feds would cancel up to $10,000 in loans for people earning less than $125,000 a year and up to $20,000 for those who received a Pell grant. federal income tax student loan debt from 2021 to 2025.

Governor Newsom called on the Legislature on Saturday to take swift action to ensure that any federal student debt relief provided to Californians would not be subject to state taxes.

A statement from the governor’s office reads, “California who get student debt relief should not be hit with taxes for it. This will provide up to $1.3 billion in tax relief to more than 3.5 million Californians. »

Of the 3.5 million eligible borrowers in California, 2.3 million are Pell Grant borrowers.

The governor’s office says individual borrowers would save an average of hundreds of dollars in state taxes and could save up to $1,860.

Under President Joe Biden’s student debt relief proposal, the federal government would forgive up to $10,000 in loans for people earning less than $125,000 a year and up to $20,000 for those who received a Pell grant.

Biden’s U.S. bailout exempts 2021-2025 student loan debt forgiveness from federal income tax.

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