Disability discharge and fed taxes

Discussion in 'Military-related education topics' started by SnafuRacer, Jul 29, 2024.

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  1. SnafuRacer

    SnafuRacer Active Member

    Hello, I have a question about student loans discharge when 100% P&T.
    On this page (https://studentaid.gov/manage-loans/forgiveness-cancellation/disability-discharge#is-discharged-amount-taxable), it says we don't have to pay federal taxes as income until 31 Dec 2025.
    Does anyone know if there's any law or ongoing effort to extend that beyond Dec 2025?
    I assume then that if loans are discharged after then, it will be a substantial tax burden, if the amount is counted as income!!
    Trying to finish my MBA and move on to PhD, using federal loans, but with the long PhD path going beyond 2025, I wonder how disability discharge would affect my taxes when discharged in the future.
     
  2. INTJ

    INTJ Member

    Call the IRS and see if there is still a form available requesting that the taxes on the discharged debt be waived due to hardship. There used to be one, but I don't know now as so much has changed since I told someone about it back in 2009 or 2010.
     

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