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Certain student loan debt forgiven by a new federal action will not be subject to federal or Oregon state income taxes.
The Biden administration in July 2023 announced it would automatically forgive $39 billion in student debt for more than 800,000 borrowers nationwide. Follow this link for more information on the student loan debt forgiveness plan.
In general, when debt is forgiven, it is considered income and is taxable. However, when Congress passed the American Rescue Plan in 2021, the bill excludes student loan debt relief as taxable income. Oregon is connected to federal tax law, so the student loan debt relief is also not subject to state taxation.
Details about canceled debt are available at this IRS Web site.
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