Income tax; exclude forgiven, cancelled or discharged federal student loan debt under the PSLF Program from the definition of "gross income".
If enacted, HB1653 would relieve many public service professionals, including teachers, nurses, and other essential workers, from a potential state tax liability associated with their forgiven student loans. By excluding such forgiven debts from taxable income, the bill aims to provide financial relief and encourage public service employment among young graduates burdened with student debt. The legislation aligns Mississippi with broader national discussions on the tax implications of student loan forgiveness.
House Bill 1653 seeks to amend Section 27-7-15 of the Mississippi Code to exclude forgiven, cancelled, or discharged federal student loan debt under the Public Service Loan Forgiveness Program from the definition of "gross income" for state income tax purposes. This legislative measure arises in response to the growing burden of student loan debt on individuals participating in public service roles, allowing them to retain more of their income by not considering their discharged debts as taxable income.
The bill is likely to meet some opposition based on broader fiscal concerns. Critics may argue that such exemptions could reduce state tax revenue, impacting the state's budget for essential services. Supporters, however, contend that the long-term economic benefits of fostering a well-educated workforce dedicated to public service will outweigh the initial loss in tax revenue. As the discussion continues, it will be essential for stakeholders to assess the bill's potential impact on state finances against its benefits to individuals and communities.