Pittsburgh, PA − August 24, 2022 − Senator Lindsey M. Williams (D-Allegheny), Minority Chair of the Senate Education Committee, released the following statement today, following President Joe Biden’s announcement that the Federal Government will forgive up to $20,000 of student loan debt for many Pennsylvania borrowers:
“With today’s historic announcement about student debt relief, I want to remind Pennsylvanians that that this debt forgiveness is not taxable as income here in the Commonwealth.
Our students and families have been waiting for this announcement. It’s important that they know that we’ve prepared by taking the steps needed to ensure that this this debt forgiveness is not taxed.”
In December, Senator Williams wrote a letter to Governor Wolf, asking the Administration to take action to reclassify cancelled student loan debt to exclude it from the definition of income. Shortly after, the Administration announced executive action to do just that and bring Pennsylvania in line with Federal definitions.
The revised Pennsylvania Tax Bulletin can be found at Personal Income Tax Bulletin 2009-02 — Cancellation of Personal Indebtedness (pa.gov).