The Education Department planned to adjust how it calculates student loan payments to correct past errors, resulting in about 804,000 people balances erased.
`(5) Special rule for discharges in 2021 through 2025.--
Gross income does not include any amount which (but for this
subsection) would be includible in gross income by reason of the
discharge (in whole or in part) after December 31, 2020, and
before January 1, 2026, of--
… blah blah federal college loans only. But the jist is, no, there’s no “tax bomb”, that’s a red herring.
Part of the American Rescue Plan specifically exempts amounts forgiven through 2025 – https://www.congress.gov/bill/117th-congress/house-bill/1319/text
Section 9675 (a):
… blah blah federal college loans only. But the jist is, no, there’s no “tax bomb”, that’s a red herring.