Income tax; exclude from gross income certain forgiven, cancelled or discharged federal student loan debt.
Impact
The implications of HB 1720 extend towards enhancing the financial well-being of public service workers, particularly in rural and underserved areas of Mississippi. By excluding forgiven amounts from gross income, the bill aligns state tax law with the intent of the federal PSLF program, which aims to attract and retain professionals in critical sectors such as education, healthcare, and other public services. Consequently, this can incentivize individuals to pursue careers in these areas, thereby supporting communities that may experience a shortage of essential services.
Summary
House Bill 1720 aims to amend the definition of 'gross income' under the Mississippi state income tax law to exclude federal student loan debt that has been forgiven, canceled, or discharged through the Public Service Loan Forgiveness (PSLF) program. This amendment specifically targets individuals who have served or are currently serving in underserved or rural communities as defined by the Mississippi Department of Health or the United States Department of Agriculture. By enacting this bill, qualifying taxpayers would not have to count forgiven loan amounts as income for tax purposes, potentially easing their financial burden.
Contention
While the bill appears to benefit public service workers, there may be some contention regarding the state's revenue implications. Critics may raise concerns about the potential loss of tax revenue due to the exclusion of forgiven loans from gross income. This could spark debates about the fairness of providing such tax breaks while balancing the state's budget and financial obligations. Additionally, stakeholders might argue that the bill does not address broader student loan issues faced by non-public service workers and could lead to disparities in tax treatment depending on one's employment status.
Income tax; exclude forgiven, cancelled or discharged federal student loan debt under the Public Service Loan Forgiveness Program from the definition of "gross income".
Income tax; exclude forgiven, cancelled or discharged federal student loan debt under the Public Service Loan Forgiveness Program from the definition of "gross income".
Income tax; exclude forgiven, cancelled or discharged federal student loan debt under the Public Service Loan Forgiveness Program from the definition of "gross income".