Will student loan debt forgiveness be taxed in California? Here’s why it’s a ‘maybe’

Millions of people will soon benefit from President Joe Biden’s student debt relief plan, though it is unclear if Californians will be taxed on the relief funds. The one-time debt forgiveness of up to $20,000 will not be federally taxed, thanks to the 2021 American Rescue Plan. Previously, debt cancellation was considered taxable income, with some exceptions. Whether or not it will be taxed on a state level, on the other hand, depends on where you live. An estimated 4 million Californians have some form of student debt. Will I have to pay taxes on my debt relief in California?Maybe. Here’s wha...