MYRTLE BEACH, S.C. (WBTW) — South Carolina won’t tax forgiven student loan debt, according to the South Carolina Department of Revenue.
In a tweet, the SCDOR said the General Assembly adopted IRC Section 108(f)(5) during the 2022 legislative session, which excludes student loan forgiveness from being considered taxable income. IRC Section 108(f)(5) was amended by the American Rescue Plan Act and paused federal taxes on student loan forgiveness through 2025.
“To the extent a student loan 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 said in a tweet.
In Mississippi, Minnesota, Wisconsin, Arkansas and North Carolina, forgiven student loans will be subject to state income taxes unless they change their laws to conform with a federal tax exemption for student loans, according to a tally by the Tax Foundation, a Washington, D.C.-based think tank.
Spokespeople for tax agencies in several states — including Virginia, Idaho, New York, West Virginia, Pennsylvania and Kentucky — told The Associated Press that their states won’t tax student loans forgiven under Biden’s program. Revenue officials in a few other states said they needed to do more research to know.
The Associated Press contributed to this report.